The year-on-year growth rate is touted to be 3.8% as compared to 8.1% growth to $244.6 billion in FY23, as per the report released by the industry body on February 16. Nasscom had projected the growth to be 8.4% in the previous fiscal year from $226 billion in FY22.
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| Indian School of Business | ISB Product Management | Visit |
The slowing of growth is driven by macroeconomic headwinds, uncertain geopolitical tensions and therefore cautious tech spending by clients leading to delays in deal closures.
Over the past more than four quarters, technology companies, especially the software services exporters, which get around 57-58% of their revenue from outside India especially from markets like North America and Europe, are witnessing weakened or muted business owing to the economic slowdown in the western markets.
“Despite all the headwinds, it was a growth year of 3.8%… while exports slowed down a bit…domestic market grew the fastest, which was a big surprise…whenever there is big shift happening, the tech industry knows how to adapt and resilience is the key magic word,” said Debjani Ghosh, president of Nasscom.
Some of the key tailwinds, she added, was the growth in ER&D (engineering, research and development) sector did better than expected, and the global capability centres (GCCs) with India being the preferred hub.
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“This is getting even stronger as we see the GCCs’ scope of work moving from just backend work to more of R&D and innovation. And this is where the India attraction goes up significantly primarily driven by talent, stability, political stability and ease of doing business,” Ghosh said.Further, while the deal closures were marginal, the big change was in the size of the deals with nearly 70% were large deals. That is good news, she added.
The tech industry, the report noted, will be adding an incremental $9.3 billion in revenue in FY24 across IT services, business process management, hardware, software products, and engineering services. This was at $18.6 billion in FY23.
Of the $253.9 billion revenues, $54.4 billion is estimated to be contributed from domestic market growing 5.9% while $199 billion will be export business growing weaker at 3.3%.
Nasscom said that enterprise client tech budgets is set to increase in 2024 over 2023 with likely improvement in hi-tech, BFSI (banking, financial services and insurance) and TMT (technology media telecom), all of which underperformed in 2023.
Rajesh Nambiar, Chairman & MD, Cognizant India and also Chairperson of Nasscom, said, “Future of the country is tech driven. Overall, we are number one as a global sourcing hub at $250 billion revenue. Nearly 90% of Fortune 500 companies are customers of Indian Tech companies. We are a significant contributor to India’s GDP…Though this year has been slightly slower for the industry.”
Hiring and AI
However, sentiments will improve in the second half of FY25 with over two-third of respondents of the tech CEOs survey by Nasscom, expecting better revenue growth in FY 2025 and hiring outlook also expected increase in both fresher and lateral hiring.
Nasscom report said that the net hiring for the technology industry stood at 60,000 for FY24, taking the total to 54.30 lakh employees.
Amid the disruption in generative artificial intelligence (Gen AI), there was a 9x increase in Gen AI related activities in calendar year 2023 over CY 2022, a total of 650,000+ employees are being trained on Generative AI skills in 2023-2024. In comparison, AI saw a 2.7x increase in activity during the period, the report highlighted.
Meanwhile, the in-demand skills gap still at 20% in artificial intelligence (AI), data, cloud and cybersecurity. “There was some level of correction in hiring which was expected and needed for the industry,” Ghosh said.
Nasscom said companies spent 62-100 hours per year per employee on upskilling. Further, by recognizing the huge gap that exists in India, we have now pivoted focus to work with over 200 universities, said the Nasscom president, in order to bridge the employability gap as more and more IT services companies have shunned hiring from campuses.
The year-on-year growth rate is touted to be 3.8% as compared to 8.1% growth to $244.6 billion in FY23, as per the report released by the industry body on February 16. Nasscom had projected the growth to be 8.4% in the previous fiscal year from $226 billion in FY22.
Elevate Your Tech Prowess with High-Value Skill Courses
| Offering College | Course | Website |
|---|---|---|
| IIM Lucknow | IIML Executive Programme in FinTech, Banking & Applied Risk Management | Visit |
| Indian School of Business | ISB Professional Certificate in Product Management | Visit |
| Indian School of Business | ISB Product Management | Visit |
The slowing of growth is driven by macroeconomic headwinds, uncertain geopolitical tensions and therefore cautious tech spending by clients leading to delays in deal closures.
Over the past more than four quarters, technology companies, especially the software services exporters, which get around 57-58% of their revenue from outside India especially from markets like North America and Europe, are witnessing weakened or muted business owing to the economic slowdown in the western markets.
“Despite all the headwinds, it was a growth year of 3.8%… while exports slowed down a bit…domestic market grew the fastest, which was a big surprise…whenever there is big shift happening, the tech industry knows how to adapt and resilience is the key magic word,” said Debjani Ghosh, president of Nasscom.
Some of the key tailwinds, she added, was the growth in ER&D (engineering, research and development) sector did better than expected, and the global capability centres (GCCs) with India being the preferred hub.
Discover the stories of your interest
“This is getting even stronger as we see the GCCs’ scope of work moving from just backend work to more of R&D and innovation. And this is where the India attraction goes up significantly primarily driven by talent, stability, political stability and ease of doing business,” Ghosh said.Further, while the deal closures were marginal, the big change was in the size of the deals with nearly 70% were large deals. That is good news, she added.
The tech industry, the report noted, will be adding an incremental $9.3 billion in revenue in FY24 across IT services, business process management, hardware, software products, and engineering services. This was at $18.6 billion in FY23.
Of the $253.9 billion revenues, $54.4 billion is estimated to be contributed from domestic market growing 5.9% while $199 billion will be export business growing weaker at 3.3%.
Nasscom said that enterprise client tech budgets is set to increase in 2024 over 2023 with likely improvement in hi-tech, BFSI (banking, financial services and insurance) and TMT (technology media telecom), all of which underperformed in 2023.
Rajesh Nambiar, Chairman & MD, Cognizant India and also Chairperson of Nasscom, said, “Future of the country is tech driven. Overall, we are number one as a global sourcing hub at $250 billion revenue. Nearly 90% of Fortune 500 companies are customers of Indian Tech companies. We are a significant contributor to India’s GDP…Though this year has been slightly slower for the industry.”
Hiring and AI
However, sentiments will improve in the second half of FY25 with over two-third of respondents of the tech CEOs survey by Nasscom, expecting better revenue growth in FY 2025 and hiring outlook also expected increase in both fresher and lateral hiring.
Nasscom report said that the net hiring for the technology industry stood at 60,000 for FY24, taking the total to 54.30 lakh employees.
Amid the disruption in generative artificial intelligence (Gen AI), there was a 9x increase in Gen AI related activities in calendar year 2023 over CY 2022, a total of 650,000+ employees are being trained on Generative AI skills in 2023-2024. In comparison, AI saw a 2.7x increase in activity during the period, the report highlighted.
Meanwhile, the in-demand skills gap still at 20% in artificial intelligence (AI), data, cloud and cybersecurity. “There was some level of correction in hiring which was expected and needed for the industry,” Ghosh said.
Nasscom said companies spent 62-100 hours per year per employee on upskilling. Further, by recognizing the huge gap that exists in India, we have now pivoted focus to work with over 200 universities, said the Nasscom president, in order to bridge the employability gap as more and more IT services companies have shunned hiring from campuses.