New Delhi: The country’s exports of software and services in the current fiscal year to 31 March will be sharply below an earlier forecast as the global slowdown dents outsourcing, expanding 16-17% to about $47 billion, an industry body said.
The National Association of Software and Service Companies (Nasscom) said on Wednesday the export-driven sector’s growth had been adversely impacted by the global financial crisis, deepening recessions, and currency fluctuations.
Earlier, it had forecast exports growth would range from 21-24% this fiscal year.
“It was an exciting first half, 24% growth much in line with industry estimates,” Nasscom chairman Ganesh Natarajan said. “In the second half, we have seen a rapid decline.”
Total revenue of the software and outsourcing sector, including the earnings from the domestic market, is expected to rise to $60 billion this year, down from the association’s July forecast of $62-$64 billion.
It expects the sector’s export revenues to rise to $60-$62 billion in the fiscal year 2010-11.
Export-driven outsourcing companies have thrived for years by bagging contracts from overseas clients, helped by a large pool of English-speaking workforce and cheaper wages.
Economic recession in the US, which accounts for more than half of the sector’s export revenue, and global financial crisis have halted the sector’s scorching pace of growth.
In the fiscal year to March 2008, the sector’s export earnings was reported 29% up to $40.4 billion.
The revelation of a massive accounting fraud at leading outsourcer Satyam Computer Services has added to the gloomy outlook for the sector, which accounts for more than 5% of India’s gross domestic product (GDP).
Indian software firms such as Tata Consultancy Services (TCS), Infosys Technologies and Wipro provide solutions like system integration, application development, supply chain designing and back-office services.
The firms are expanding in Europe, Asia and the West Asia to lower their dependence on the US.