India’s information technology and business process management sector is estimated to clock a 7.7% year-on-year increase in revenue in 2019-20, faster than the 6.1% growth reported the previous year, according to the National Association of Software and Services Companies (Nasscom).
The sector will generate total revenues of $191 billion during 2019-20, showing the demand for tech spending has been stable despite an economic slowdown, a Nasscom report released on Wednesday said. Indian enterprises are expected to spend over $2 billion domestically during the period on digital transformation, while digital revenues growth during the period is seen at over 23%.
“We were cautiously optimistic last year and the outcome was better than our expectations," said Keshav Murugesh, chairman, Nasscom. “We maintain the same outlook this year."
The performance of the IT industry shows the increasing focus on the digital transformation of businesses and also the expansion of digital-driven services to cater to clients across the globe, added Murugesh.
The IT services sector is seen clocking the highest revenue of $97 billion (growth of 6.7%), followed by e-commerce at $54 billion (growth 25.6%), the Nasscom report said.
The sector will generate exports of over $147 billion in revenues in FY2020, up 8.1% from the previous year. The report showcased the growth of the industry, commemorating several milestones between FY09 and FY19 such as crossing $105 billion in overall revenue, adding 2 million employees/jobs and creating 10,000 new technology companies in overall consolidation.
Nasscom also noted that the lack of digital skills in the workforce and growing cybersecurity issues as key risks. The industry body is trying to address these areas of concern by reskilling workers to ensure that the talent pool is sufficiently equipped for the digital transformation.
Nasscom also noted that the industry is investing 1-1.5% of its revenue into reskilling the employee base, which has created a digitally skilled workforce of almost 900,000 in the country. The industry also reported 205,000 net hires, displaying a return to strong hiring after five years. “Companies are not coming here for cost-cutting anymore but rather for value addition. India continues to be a choice destination for companies to set up global capability centres having grown to almost 1,300 centres compared to around 1,250 last year," said Debjani Ghosh, president, Nasscom.
Contrary to fears that digitization may lead to job losses across industries, it has actually added more jobs coupled with reskilling initiatives, she added.
At the same time, she expressed the hope that India’s IT talent does not continue to face job insecurity concerns due to stringent new visa rules which are being introduced in the US and other western countries. “For companies to remain competitive, they have to access the best talent in the world. India is fuelling a lot of the global innovation. The US administration has to realize that 90% of the H1B talent goes to US-based companies and they need that talent," Ghosh said.
She added that talent, trust and innovation remain the key imperatives as the Indian IT industry moves into the first year of this decade. The industry continued its hiring momentum with 205,000 new hires, and have 884,000 digitally skilled talent in the country. The report also listed five key megatrends that will drive the next decade and create unprecedented business and consumption shifts, pushing digitalization-led global output to nearly $100 trillion, or 40% of 2030 global GDP.
These megatrends include data-led economy, wherein a new generation of workforce is disrupting traditional patterns of work, the Nasscom report said.