Nasscom predicts IT industry to surpass $ 250 bn, growing by 3.8% in '24

21 Feb 2024 CW Team

The deceleration in growth is evident in incremental revenue addition, which has decreased from $ 19 billion in FY23 to $9.3 billion in FY24. According to Nasscom reports, global tech spending has declined by around 50 per cent, and there has been a 6 per cent decrease in tech contracts in 2023.

Debjani Ghosh, President, Nasscom, expressed the need to reassess the target of $ 350 billion by 2026 based on the performance in 2023 and how 2024 unfolds. Despite challenges, India remains the world's largest sourcing hub, contributing 1 per cent to the country's GDP through digital public infrastructure.

Rajesh Nambiar, chairperson of Nasscom, acknowledged the industry's muted growth in FY24 but highlighted its continued expansion. Despite the economic downturn, the Indian tech industry remains a net hirer, focusing on upskilling. The industry is expected to add 60,000 jobs in FY24, a significant decrease from the 290,000 added in FY23.

The strategic review emphasizes the industry's commitment to spending 60-100 hours per year per employee on upskilling. While hiring numbers may be subdued, the CEO survey indicates improved outlook for both revenue and hiring.

Green shoots in the industry include growth in engineering, research and development (ER&D), global capability centres (GCCs), and artificial intelligence (AI). GCCs are expanding in India, with 53 new additions in 2023. Domestic revenue saw a notable growth of 5.9 per cent, outpacing exports.

Regarding AI, the industry is actively working on it, with over 70 per cent having well-defined frameworks for financing use cases and over 10 generative AI use cases. While there is a ninefold increase in GenAI activity in CY23, the impact on hiring remains uncertain.

Debjani Ghosh noted that, currently, there are no job losses due to AI, but acknowledged the challenge of technological change outpacing the ability to skill people.

The aspiration for the Indian information-technology (IT) industry to reach $ 350 billion by 2026 appears challenging as its growth rate has dropped to a low single digit. It is projected to reach $ 253.9 billion in FY24, growing at 3.8 per cent year-on-year, a decline from the 8.4 per cent in the previous financial year. The deceleration in growth is evident in incremental revenue addition, which has decreased from $ 19 billion in FY23 to $9.3 billion in FY24. According to Nasscom reports, global tech spending has declined by around 50 per cent, and there has been a 6 per cent decrease in tech contracts in 2023. Debjani Ghosh, President, Nasscom, expressed the need to reassess the target of $ 350 billion by 2026 based on the performance in 2023 and how 2024 unfolds. Despite challenges, India remains the world's largest sourcing hub, contributing 1 per cent to the country's GDP through digital public infrastructure. Rajesh Nambiar, chairperson of Nasscom, acknowledged the industry's muted growth in FY24 but highlighted its continued expansion. Despite the economic downturn, the Indian tech industry remains a net hirer, focusing on upskilling. The industry is expected to add 60,000 jobs in FY24, a significant decrease from the 290,000 added in FY23. The strategic review emphasizes the industry's commitment to spending 60-100 hours per year per employee on upskilling. While hiring numbers may be subdued, the CEO survey indicates improved outlook for both revenue and hiring. Green shoots in the industry include growth in engineering, research and development (ER&D), global capability centres (GCCs), and artificial intelligence (AI). GCCs are expanding in India, with 53 new additions in 2023. Domestic revenue saw a notable growth of 5.9 per cent, outpacing exports. Regarding AI, the industry is actively working on it, with over 70 per cent having well-defined frameworks for financing use cases and over 10 generative AI use cases. While there is a ninefold increase in GenAI activity in CY23, the impact on hiring remains uncertain. Debjani Ghosh noted that, currently, there are no job losses due to AI, but acknowledged the challenge of technological change outpacing the ability to skill people.

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