India IT-BPO Industry 2012 – Slow growth in 2013 & Outlook 2020

NASSCOM predicts slow growth for India IT-BPO Industry in FY 2012-2013 with a lesser growth rate of around 14% with revenues of around US$115 billion in FY 2012-13 compared to revenues of around US$ 101 billion at 15% growth it expects for FY 2011-12. For the first time India IT-BPO revenues will cross US$100 billion mark in FY 2011-12 and exports contribute US$69 billion (16.3%YoY) and domestic IT services contribute revenues of US$32 billion (16.7%YoY). In FY13, the IT and BPO export revenues is expected to grow at 11-14% (US$78 billion), while the domestic revenues are slated to grow by 13-16 %( US$37 billion) and reach a total of US$115 billion. Growth is primarily driven by new business models and disruptive technologies like such as cloud, mobility, analytics, social media, and vertical specific solutions. NASSCOM expects a 4.5% growth in the Global Technology spending in 2012 and further predicts that industry can meet the vision 2020 target of touching $225 billion by 2020.

Contribution of IT-BPO Industry to India's gross domestic product has gone up to 7.5% from 6.4% in 2008. SME sector contributed US$5 billion in revenues in current fiscal. Salary hikes could be in the range of 8-10% in 2012-13 as compared to 10-14% in 2011-12. IT Services segment grew by a CAGR of 16% in the last four years to grow to $40 billion from $22 billion in 2008 despite the economic problems in US and Europe. Indian BPO industry has a share of 36% in the global BPO outsourcing market, and significant revenues contributed by customer interaction business at $6.7 billion. Research and development exports went up by a CAGR of 12% to $10 billion ($7 billion in 2008), taking a 15% pie in the overall IT-BPO exports. NASSCOM also projected that the IT-BPO industry will add 200,000 jobs in 2012-13, down from 230,000 jobs in 2011-12 and 240,000 in 2010-11.

Challenges for the India IT-BPO industry in FY2012-13 include elections in the US, leadership changes in euro zone and the ongoing sovereign debt crisis and India's own policy paralysis like no road map on direct taxes code, goods and services tax, SEZ issues and increased tax activism. NASSCOM will relook at its forecast in October 2012 as the global macro economic scenario is still uncertain. Indian IT companies too have sounded cautious in their outlooks and hope that the market condition will improve from the latter part of this year. Source: NASSCOM & News Articles