India’s IT sector confident can ride out global slowdown

India's flagship outsourcing industry is grappling with a rupee that rose 12 percent last year-lowering the local equivalent of every dollar earned-and a potential recession in its main market, the United States.

'The demand we still feel is strong,' NASSCOM president Som Mittal said Friday in the nation's financial capital Mumbai, where the three-day meeting drew IT players from India and around the world.

Recommended For You

Honey Singh on the rise: Indian rapper is back with a global tour and renewed life

Dubai: Can a landlord charge different rents to tenants of the same building?

‘Shock, happiness’: How 17-year-old Elliott Bathe got top role in Dubai Student Council

Clinical Pakistan whitewash Sri Lanka 3-0 in ODI series

National Day holiday: UAE announces 4-day Eid Al Etihad break for public sector

 

The sector expects to meet or even exceed its software export target of 60 billion dollars and overall software and services revenue goal of 73-75 billion dollars by 2010, Mittal said in an interview.

India's IT sector with its skilled, low-cost work force that has planted the country on the global business map, is keeping its fingers crossed that the international slowdown will turn out to be a blessing.

It is hoping the financial turmoil in the US and elsewhere could drive businesses to farm out more work to cheaper Indian firms even as they pare overall technology budgets.

Mittal said past slowdowns had led companies to outsource more due to cost pressures.

He said the rupee's rapid appreciation against the dollar and pressure on talent availability-a fierce war for talent has driven up wages and staff turnover-had opt pressure on margins.

However, India's IT's sector, which accounts for 5.5 percent of gross domestic product, up from just 1.2 a decade ago, has shown sustained ability to take out costs, Mittal said.

And an ageing population in the West is creating new demands for outsourcing services which will continue to drive demand even in a slowdown, he added.

The industry has been seeking to diversify its markets to offset its reliance on the US, which remains the largest outlet for India's software, sector taking 61 percent of its exports.

Europe-bound exports, however, have climbed 55 percent since 2004.

Britain now accounts for 18 percent of India's software services market and continental Europe takes 12 percent.