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India’s tech sector growth rate seen halving to 3.8% in FY24

February 16, 2024
in News
India’s tech sector growth rate seen halving to 3.8% in FY24
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India’s technology sector is expected to grow at a slower pace this fiscal year as clients hold back spending and delay decision-making, its main industry body said on Friday.

The National Association of Software and Service Companies (Nasscom) expects the industry’s revenue to grow 3.8 per cent to $253.9 billion, compared with the previous fiscal year’s 8.4 per cent.

The expansion this year will likely be driven by lower- to mid-single-digit contributions from all segments, including information technology, business process management, software products, engineering research and development, Nasscom said.

Software exports, comprising services and sale of products to clients, fell 3.3 per cent to $199 billion as opposed to a 11.4 per cent growth in the previous year.

The sector is expected to add 60,000 jobs on a net basis, a nearly 80 per cent drop from the previous year’s addition of 290,000 jobs.

However, the industry’s total headcount increased to 5.43 million from 5.37 million a year earlier.

The industry body did not disclose the geographical or industry-specific distribution of the revenue.

The current fiscal was marked by a lot of uncertainties and slow decision-making, Sangeetha Gupta, senior vice president at Nasscom, said. “So if a project that should (have) got started in a quarter got pushed down by six months, you’re seeing that impact on revenue growth,” Gupta said, adding that there was a “correction in spending” after COVID-related boom.

The pandemic pushed clients to enhance their digital investments, especially in sectors such as retail, banking and financial services amid curbs on movement.

However, the surge in investments started fading since the beginning of this fiscal year due to global macroeconomic uncertainties.

There is some “reversal” of sentiments in 2024 as US recession fears are weakening, Nasscom President Debjani Ghosh said.

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Copyright for syndicated content belongs to the linked Source : ChannelNewsAsia – https://www.channelnewsasia.com/business/indias-tech-sector-growth-rate-seen-halving-38-fy24-nasscom-4129341

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