Indian IT sector sees limited impact of U.S. meltdown
By siliconindia   |   Wednesday, 24 September 2008, 19:30 IST
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Bangalore: The global financial meltdown following the collapse of U.S. investment banks will have limited impact on the Indian IT sector in the short and medium terms, but poses a challenge in the long term, says Som Mittal, president of IT-BPO industry body Nasscom (National Association of Software and Service Companies). "It is a cause for concern, not panic. The Indian IT sector is resilient to bear the impact of the turmoil. We need to wait and watch to find out how deep is the crisis. There will be some downside in the short and medium terms, which will be two-to-four quarters," Mittal told IANS in an interview. In the long term, the export-driven software sector has to become risk-protected from such uncertainties by penetrating other geographies and expanding its service offerings to diverse verticals so as to retain its competitive edge and sustain the growth momentum. Discounting apprehensions over meeting the revenue forecast for the current fiscal (2008-09), Mittal said though the growth rate would be lower than in the previous fiscal, there was no cause for alarm, as the base would be wider and in line with the long-term projection made by the McKinsey report in 2005. "Growth will happen but at 22-23 percent it will be lower than in the last two-three years when the booming IT industry posted a CGPA (cumulative growth per annum) of 31 percent. When the base changes (widens), it will be difficult to grow at the same rate over a period," Mittal pointed out. As per the Nasscom forecast in June-July, software exports are projected to grow by $9 billion to $50 billion in fiscal 2008-09 from $41 billion in fiscal 2007-08 and $32 billion in fiscal 2006-07. As per the McKinsey report, exports are set to touch $60 billion by fiscal 2009-10 even if the growth rate remains lower at 23-25 percent. %0

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