Increased oversight on work visa regime in countries like the US, competition from new players in Eastern Europe and lack of skilled manpower in digital technologies are among the key challenges for the Indian IT- BPM sector, the Economic Survey-II today said.
The survey, tabled in Parliament today, said the Indian $50-billion IT-BPM industry is "feeling the pinch" of the global slowdown and political uncertainties as clients go slow on decision-making and investment processes.
"Misconstruing mobility of skilled people as immigration issue is a deterrent to the growth of this global business resulting in many barriers to free movement of skill and data in the major markets," it said.
The survey cited examples of countries like the US, the UK and Australia that are undertaking various reforms in their work visa programmes to protect the interests of the local workers.
Also, the EU has introduced 'Data Protection and Privacy Rules' that effectively prevents Indian companies from providing services from India, while the US has been given safe harbour status, the survey noted.
The survey also highlighted the increasing competition that India faces from new "digital only entrants" from Eastern Europe and Latin American countries, including newer companies like Globant, EPAM, and Luxoft.
It said while Indian IT services companies were the "disruptors" and had created the modern offshoring industry, they are now incumbents, challenged by a host of specialised and niche startups that have emerged in the new digital environment.
The survey also pointed out domestic challenges like shortage of skilled digital talent, underdeveloped infrastructure in tier II and III cities and some restrictive regulations for product startups.
Published Date: Aug 11, 2017 20:31 PM | Updated Date: Aug 11, 2017 20:31 PM