Software exports for the year starting 1 April may expand at a slower pace than in the current fiscal year because of currency volatility and global economic and political pressures, Nasscom said.

The software lobby body on Tuesday forecast that software exports for 2015-16 would grow between 12-14% to about $110-112 billion, compared with the 13-15% growth estimate for the current fiscal year. According to Nasscom’s latest forecast, overall revenue for the IT sector is expected to grow at 13% to $146 billion in the year to 31 March.

On the domestic front, Nasscom forecast 15-17% growth to reach $55-57 billion in the next fiscal year. The Indian domestic market is expected to grow by 14% to $48 billion in the current fiscal year, on the back of e-commerce growth. Domestic growth is expected to be led by e-commerce, government initiatives and technology adoption by industries. A government investment of $26 billion in 2014-15 also helped domestic revenue growth, said Nasscom.

The lobby group is confident of meeting its $300 billion Indian IT sector revenue target by 2020 on the back of steady growth across sectors.

“While the current growth estimates are on back of the current macro trends, we believe that the industry has a potential to sustain a 13-15% growth for a long period of time. So far the commentary from managements has been positive that the sector can put up the growth in line with the FY15 growth projections," said Sarabjit Kour Nangra, an analyst at Angel Broking Pvt. Ltd.

The IT industry continues to be the largest private sector employer in India, adding 230,000 employees in 2014-15, taking the total number of jobs in the industry to 3.5 million, while accounting for 9.5% of the gross domestic product. The IT industry also holds the largest share of total services exports at 38%.

India is also the fourth largest start-up hub in the world with over 3,100 technology start-ups and industry mergers and acquisitions in excess of $5.3 billion in 2014-15.

Speaking on the sidelines of a press conference in Mumbai announcing the forecast, R. Chandrashekhar, president of Nasscom, said India could easily become the world’s second largest start-up hub in the next two years, looking at the rapid pace of new enterprises mushrooming in the country.

Exports to the US, the largest market, grew at above-industry average, aided by an economic revival and higher technology adoption. Demand from Europe remained strong during the first half of the financial year but softened during the second half due to currency movements and economic challenges.

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