Y P Rajesh
NEW DELHI: India's premier software industry body has cited the ongoing
economic slowdown in the US market and has lowered the country's software export
growth forecast for the current fiscal year to 40-45 per cent from 52 per cent,
according to Nasscom chairman Phiroz Vandrewala, here on Sunday.
The National Association of Software and Services Companies (NASSCOM) had in
January forecast that software exports during 2001/02 (April-March) would jump
to $9.4 billion from $6.2 billion in the previous year. "Our feeling is
that growth would now be around 40-45 per cent due to the slowdown," Phiroz
Vandrewala told Reuters, referring to an economic slowdown in the US market,
which accounts for nearly 60 per cent of India’s total sales.
He said the executive committee of Nasscom - whose charismatic president
Dewang Mehta died last week - would meet later on Sunday before announcing more
details. Indian software services firms have grown by more than 50 per cent in
recent years, but progress has been curbed by the US slowdown.
The downward slide has forced several leading software services firms, some
of which had earlier reported profit growth of more than 100 percent, to issue
earnings warnings and in turn has led some equity research firms to downgrade
tech stocks. Software sector bellwether Infosys Technologies Ltd., India's
second largest listed software export firm, last week reported that both sales
and profit doubled in the January-March quarter.
At the same time, it signaled a sharp slowdown ahead. The company said it
expected a revenue growth rate of 30 per cent for fiscal 2002, compared to 113
per cent in the previous fiscal, because of the "current challenging
economic environment in North America."
That forecast triggered a fall in all major Indian technology stocks and the
benchmark 30-stock Bombay index sank by 6.17 per cent before staging a recovery.
Some representatives of the software industry have nevertheless said that India
could gain from the downturn, as US corporates, aiming to economize, would look
at outsourcing their tech needs from low-cost Indian firms.
Analysts have said that Indian tech firms are increasingly looking at winning
customers in Europe and Japan which were earlier perceived as tough markets
because of language and cultural barriers and different business practices.
(C) Reuters Limited 2001.