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Indian IT growth to shrink to 16 percent
By siliconindia
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Wednesday, 04 February 2009, 23:12 IST |
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New Delhi: The downturn has effaced all the shine of the IT sector and India has to brace up for a tougher future as the growth for the sector is expected to slow down to 16-18 percent. Earlier Nasscom had lowered the growth estimates to 21-24 percent from 30 percent, which is likely to be lowered further in its revised estimates.
"While there has been volume growth from Europe, currency fluctuations ensured value erosion, leading to lower overall growth rates. The industry growth rates are now in the teens, down from 21-24 percent earlier," an industry source told The Economic Times, without specifying the actual revised growth rates. Apart from the currency fluctuations, the Indian players have to cope with the emergence of new destinations for outsourcing.
The large value contracts for the Indian IT are also witnessing a halt. "In fact, the total contract value in the first-half of 2009 will be softer than in the first-half of 2008. This will be a defining year for the industry, as the growth is lower than the previous years," said Sid Pai, partner and Managing Director, Technology Partners International (TPI), a global sourcing firm.
The only hope is seen from the domestic market where deals worth $6.5 billion have been signed in 2008. "The year, however, is expected to see more of smaller deals with $25 million a year being the sweet spot for new contracts," added Avinash Vashistha, CEO, Tholons, a Bangalore-based advisory firm.