The Indian Information Technology (IT) sector is poised for a modest yet resilient growth trajectory in the fiscal year 2024 (FY24), despite grappling with a challenging economic climate both domestically and globally. Forecasts suggest a 3.8% growth, with total revenues projected to reach $253.9 billion. This growth, however, is notably tempered by several factors, including a significant decline in global tech spending and a decrease in tech contracts, as reported by Nasscom, the apex trade body representing the Indian IT industry.
In its annual review, Nasscom highlighted the substantial impact of the global economic slowdown on the Indian IT landscape. The industry witnessed a notable decline in global tech spending by approximately 50%, coupled with a 6% decrease in tech contracts in the preceding year (2023). These challenges, while daunting, have spurred a collective effort within the sector to navigate the current terrain with resilience and adaptability.
Despite the subdued economic conditions, the Indian IT industry managed to add 60,000 net jobs in FY24, bringing the total headcount to 5.43 million. However, Nasscom acknowledged the cautious demand environment and the industry’s shift towards enhancing utilization and adopting a more just-in-time hiring model in response to prevailing uncertainties.
Rajesh Nambiar, Chairperson of Nasscom, expressed confidence in the industry’s ability to overcome prevailing headwinds. He cited factors such as the anticipated growth in digital tech spending in 2024 and the emergence of alternative demand sources, customer retention strategies, and faster go-to-market approaches in newer markets as catalysts for resilience and growth.
Segments such as Global Capability Centers (GCC) and Engineering Research and Development (ER&D) have emerged as pivotal growth drivers within the Indian IT ecosystem. The expansion in the addressable market, fueled by digital capabilities and global ER&D sourcing, has propelled these segments into the spotlight.
Debjani Ghosh, President of Nasscom, underscored the imperative of capability building in FY2025, envisioning it as the year of embracing the ‘new normal.’ Ghosh emphasized the significance of the 4Rs—reshape, reskill, rewire, and R&D investments—as guiding principles to navigate prevailing challenges and foster sustainable growth in the industry.
In conclusion, while the Indian IT sector confronts multifaceted challenges amidst a turbulent economic landscape, it remains resilient and adaptive, poised to leverage emerging opportunities and drive innovation. With a steadfast commitment to capability building, reskilling initiatives, and strategic investments, the industry is primed to emerge stronger, fostering a dynamic ecosystem that thrives in the face of adversity.