The National Association of Software and Service Companies (Nasscom) has released its Annual Strategic Review report, projecting that India’s technology industry revenue will reach $253.9 billion by the end of the 2024 fiscal year. However, the growth rate is expected to slow down to 3.8 percent compared to the previous fiscal year.
The report indicates a significant slowdown in overall growth projections, attributing it to delays in deal closures, uncertainties stemming from tech budget cuts of customers, layoffs, and macroeconomic headwinds.
Despite these challenges, the industry is poised to add an incremental $9.3 billion in revenue in FY24 across various sectors including IT services, business process management, hardware, software products, and engineering services.
The slowdown particularly affects Indian tech companies heavily reliant on markets like North America, which is currently experiencing an economic downturn. This situation has presented a double whammy for IT services companies.
In terms of employment, the industry is expected to create 60,000 new jobs in the financial year 2023-24, taking the total to 54.30 lakh employees. Rajesh Nambiar, Chairman & MD of Cognizant India and Chairperson of Nasscom, emphasized the significance of the tech industry, stating, “The future of the country is tech-driven. Overall, we are number one as a global sourcing hub at $250 billion revenue. Nearly 90% of Fortune 500 companies are customers of Indian Tech companies. We are a significant contributor to India’s GDP though this year has been slightly slower for the industry.
This slowdown occurs against the backdrop of India’s resilient economy compared to other global economies like the US and UK. On February 16, a Goldman Sachs India economist predicted that the country’s growth may exceed 6 percent for the rest of the decade, potentially driving more investments from China into India.