Bangalore: India’s export-focused software sector faces an uncertain four to six quarters as deepening global economic turmoil dents technology spending and slows deals, the sector’s main lobby group said on Tuesday.
Software firms have grown used to years of scorching expansion but the global financial crisis and recession in the United States, which contributes more than half of revenues, have dented confidence.
“At this point in time, we’re getting mixed signals,” Som Mittal, president of the National Association of Software and Service Companies (Nasscom), told reporters on the sidelines of a technology conference.
“Very clearly, the decision-making is slow at this time.”
Earlier this month, India’s No. 2 software exporter, Infosys Technologies, said it expected sector growth this year to slump by nearly half to 15%.
“This is unprecedented,” Mittal said, referring to the global economic slowdown. “Consumer sentiment is low all across and that is what is impacting India.”
Exports growth in the second half of this fiscal is expected to slow from the first six months, and any clarity on momentum would only be apparent in the first quarter of 2009/10, he said.
Mittal reiterated that Nasscom would revise its forecast for the full year. In July, it forecast revenue growth between 21% and 24% to about $50 billion in the year to March 2009.
Hiring by outsourcers would be lower in the short term. The sector recruits hundreds of thousands of middle class software professionals every year.
Earlier this month, Infosys said it would freeze recruitment after meeting this fiscal year’s target.