Nasscom cuts IT export growth outlook on global uncertainties

Industry body Nasscom on Wednesday downgraded the growth prospects for India’s IT exports this year to a range of 8 per cent to 10 per cent, from its earlier forecast of 10 per cent to 12 per cent, citing uncertainties arising from growing anti-globalisation rhetoric in the developed world.

Specifically, the lack of clarity about the Brexit process and the Donald Trump regime’s policies in the U.S are aggravating factors.

“There are transient challenges like the U.S. election outcome that not too many had anticipated as well as economic reasons such as the decline in growth rates in key markets like America, the U.K. and EU,” Nasscom president R. Chandrashekhar said, adding that the sector is likely to face the impact from the global downturn for a couple of more quarters.

Global clients are delaying decisions on IT spends and many have also deferred existing assignments, although there have been no cancellations yet, he said.

Industry verticals like banking, financial services and energy have slowed down spending in the U.S. due to political uncertainties and interest rate expectations from the U.S. Federal Reserve that didn’t materialise.

Awaiting clarity

Nasscom will re-assess the industry’s prospects when more clarity emerges on both the Brexit roadmap and Mr. Trump’s approach to governance in the U.S.

“Finally, when actual action comes and the hard realities of governance come in, then an assessment will have to be made as to what is good for their countries as well,” Mr. Chandrashekhar said.

Stressing that the new frequent traveller scheme offered by the U.K. Prime Minister Theresa May does not bear any relationship with IT professionals’ needs, Nasscom said it is aware of a fresh consultation being started by the U.K. government on immigration issues.

“We believe that the creeping protectionism across the world and the rising anti-globalisation is not very good for the global economy or for that matter, for the economy of those countries. It is not purely an economic question, but a political and economic question in which immigration is a factor.

“We are not concerned with immigration, but only concerned with the temporary movement of skilled workers which is a trade issue,” he said.