Hyderabad, Feb 20 - The National Association of Software and Services Companies (Nasscom) expects India's IT exports to grow at 7-9% to be at $135-$137 billion in 2018-19.
The IT exports during the current financial year are projected to be $126 billion, a growth of 7.8% over the previous year.
The domestic revenues, excluding hardware, is expected to grow by 10-12% to be at $28-29 billion in the next financial year against $26 billion likely in FY2018.
During 2018-19, the industry is expected to add 100,000 new jobs -- same numbers added during the current year.
Nasscom announced the key trends for the current year and the outlook for the next year on the sidelines of the special edition of Nasscom India Leadership Forum in conjunction with the World Congress on Information Technology (WCIT).
Nasscom president R. Chandrasekhar told reporters that though there are 39 days left in the current financial year, they expect to wind up with $167 billion revenues excluding the e-commerce pie ($38.5 billion).
"The year 2017-18 began on a muted note, but driven by a better growth in the second-half of the year is expected to clock revenues of $167 billion, representing a growth of 7.8% for export revenues and 10 per cent in domestic revenues. E-commerce sector is expected to grow by 17% in GMV terms," he said.
Term GMV or gross merchandise volume refers to the total value of merchandise sold over a given period of time through an e-commerce site.
The growth was primarily driven by the digital component, which grew at 30%, followed by E&RD (Engineering and Research and Development) 13% and BPM (Business Process Management) at 8%.
Though the domestic market grew to $26 billion from $24 billion the previous year, the Nasscom believes that it has huge potential and the same can be tapped by removing regulatory and infrastructure barriers.
He said the positive outlook is based on global economic growth and growth trends of digital spending. "The mood is upbeat, the trends positive. There's broader upswing in global economy, the US economy and the revival in Europe is translating into business opportunities but with a little bit of lag. We will see this kicking in later part of the year," he said, indicating that the next financial year may end with higher than the projected growth.
Chandrasekhar admitted that some challenges like the changes in immigration which are on the anvil do impact the overall positive sentiment. "Headwinds are still there and some of the uncertainties remain but the overall industry continues to grow demonstrating its ability to overcome challenges."
Nasscom expects that the future of the industry will lie in "Digital at Scale" as global digital spending is growing at 20 per cent annually. India's digital revenues grew at 30% in FY2018, demonstrating the base for a solid foundation in digital capabilities built by the sector.
Chandrasekhar said the digital component was expected to grow 1.5-2X of the industry growth. The digital becoming all pervasive blurring IT industry sector boundaries, he observed.A
"It's a great milestone for the software and services industry to cross $150 billion - tripling in size in less than a decade. The growth of the B2B startup sector also represents a unique opportunity for India to build innovative solutions for India and the world. However, what lies ahead is even more exciting. From small digital pilots, to POCs with product players, we are witnessing industrialisation of digital as the wave ahead," said Raman Roy, Chairman, Nasscom.
While admitting that hiring may not be at the level witnessed during heydays, he said the industry would still be creating 100,000 new jobs, the same it added in the current year. While the attrition rate is likely continue in the core IT sector, the technology hiring in adjoining sectors will go up, thanks to the rapid growth in digital.
"There is continuous decline in the ratio of revenues to employment. There has been 50% decline. The decoupling is due to factors like automation, onshoring and effective utilisation of existing headcount. It had greater impact outside the sector generating employment in other sectors like manufacturing, healthcare and financial sector growing at much faster pace," said Chandrasekhar.
He believes the domestic technology adoption will continue with double digit growth. He claimed that domestic technology adoption is bringing the dramatic change with government initiatives like skilling, JAM (Jan-Dhan, Aadhaar and mobility) and large enterprises including public listed companies spending more on digital.
He said the initiatives like reskilling, centres of excellence, innovation centres, talent acquisition and investment in technology were enhancing the digital capabilities.
He also claimed that the digital ecosystem is witnessing dramatic changes with growing number of mobile phones, Internet connections and increase in data consumption. India has also become number one country in app downloads, he added.