In a significant revelation, Nasscom’s annual strategic review unveils a slowdown in the growth of India’s technology industry, projecting a 3.8% year-on-year growth in the financial year 2023-24, a stark drop from the 8.4% growth witnessed in the preceding fiscal year.
This decline is attributed to the global economic slowdown, compelling international clients to trim discretionary spending and focus on optimizing cost efficiency. The Indian tech industry heavily relies on revenue from the export of services to key markets like North America and Europe.
Nasscom President Debjani Ghosh highlighted that the decision-making process for large deals in 2023 stretched longer than usual, impacting the industry as deals were pushed into the next year.
Revenue from exports (excluding hardware) is expected to grow by 3.3% annually, reaching $199 billion in reported currency. The engineering research and development sector alone is anticipated to contribute 48% to this figure. On the domestic front, revenue is projected to experience a 5.9% growth, reaching $54.4 billion in FY24.
Despite the slowdown, the industry is set to witness a net job addition of 60,000, with AI, cloud, data, and cybersecurity emerging as top in-demand skills for 2023. In the previous year, the tech industry created 2.7 lakh jobs.
Nasscom also notes a commitment from the tech industry to invest 60-100 hours per employee annually in upskilling. The report highlights that between 2023-2024, over 6.5 lakh employees received training in Gen AI skills, with overall AI activity seeing a 2.7 times growth in 2023 compared to 2022.
In the 2024 Annual Enterprise & Tech Services CEO Survey by Nasscom, over two-thirds of respondents anticipate better revenue growth in FY25. Factors such as a robust deal pipeline, project implementation, expansion in Global Capability Centers (GCCs), AI transitioning from Proof of Concept (PoC) to production, and increased discretionary spending are expected to drive this growth. Industries like banking, financial services and insurance (BFSI), high technology, and technology, media, and telecom (TMT), which underperformed in 2023, are likely to show improvement in 2024.
