New Delhi: Global political and economic uncertainties, slowdown in IT spends by banking/financial services and currency volatility have led Nasscom to slash India's software export growth outlook to 8-10 per cent for the current fiscal.
The lowering of full year growth guidance, from the earlier estimate of 10-12 per cent, mirrors the muted outlook given by Indian IT majors such as Infosys and Wipro after the September quarter results.
"The industry is going through a transient phase with various domestic and global factors impacting its performance," Nasscom President, R Chandrashekhar said.
The IT and BPM export revenue is now expected to be USD 116-118 billion in 2016-17 as against USD 119-121 billion projected at the beginning of the year by the software services industry body.
The industry had notched up export revenue of USD 108 billion in 2015-16. Nasscom said the incremental revenue would be between USD 8-10 billion in 2016-17, as against USD 10 billion in 2015-16.
The export revenue growth (in constant currency) was 12.3 per cent in the previous financial year.
Global political uncertainties (Brexit and post-election dynamics in the US), economic uncertainties (currency volatility and GDP decline in key markets) and slowdown in financial services, energy and telecom are all impacting the industry's revenue growth, Nasscom said.
"The effect of various short term factors may show for a couple of more quarters, but the worst is behind us," Chandrashekhar said, adding that while there has been deferring of deals no major order cancellations have been reported yet.
The short-term political and economic uncertainties are expected to last for two quarters or so, but pervasive technology trends like increase in digital spends, smaller deal sizes and move towards partnership arrangements in contracts will be visible over a larger period, he said.
Indian firms will have to enhance their digital capabilities and reskill themselves, to stay globally competitive, he added.
Nasscom emphasised that its long term targets for the Indian IT industry remain unchanged and the sector is on track to reaching USD 350 billion revenue mark by 2025.
On whether the new administration in the US under President Donald Trump would impact business prospects of Indian tech industry given his anti-outsourcing posturing, Chandrashekhar said that economic realities will ultimately lead to a more balanced and measured approach.
The export-led Indian IT industry derives over 60 per cent of its revenue from the US.