Trump policies: Uncertainty forces Nasscom to defer FY18 growth guidance by a quarter

Initiates deeper interactions with global customers & industry providers to get clear perspective

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Trump’s “America First” programme and his administration’s proposed policies on H-1B visas targeting IT workers have spooked IT majors in India as well as the US.

In an unprecedented move, IT industry body Nasscom has deferred the growth guidance for the next fiscal (FY2018) by a quarter in the wake of uncertainties caused by US President Donald Trump’s new policies.

On the other hand, amid continuous technology disruptions, political upheavals and slowdown in information technology-business process management (IT-BPM) global spending, the Indian IT-BPM industry is projected to grow at a rate of 8.6 per cent (in constant currency) to reach over $155 billion in FY2017, Nasscom said on Wednesday.

Nasscom president R Chandrashekhar said the association would come out with its guidance for the IT and the business process management sector for FY2018 in next quarter, most probably in May, once it is done with “deeper interactions” with customers and other stakeholders. “While there are some uncertainties in the short term, the initial data from global analysts on tech spending in 2018 is promising. We are initiating deeper interactions with all stakeholders – global customers and industry providers – to get a more reliable and clear perspective on the projections for FY2018 and will give the guidance in the next quarter,” Chandrashekhar said at 25th annual Nasscom India Leadership Forum.

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Trump’s “America First” programme and his administration’s proposed policies on H-1B visas targeting IT workers have spooked IT majors in India as well as the US. Technology companies in the US depend on H-1B visas to hire scores of non-American employees — including a vast number from India — every year. The IT industry is awaiting clarity on Trump’s plans to more than double the minimum salary for H-1B visa-holders and massively curb visa issuance to computer engineers.

For FY2017, IT-BPM exports from India are expected to reach $118 billion. “India’s domestic IT-BPM market is expected to grow by 12 per cent year-on-year to reach Rs 2,54,500 crore. The industry currently employs over 3.86 million people, growth of 5 per cent and addition of 1.7 lakh people over FY2016,” said CP Gurnani, chairman, Nasscom, and MD & CEO, Tech Mahindra.

“In terms of the markets, US and APAC (Asia Pacific) are fastest growing at 7.8 per cent with gradual stabilisation in the growth of the European market. Retail, healthcare and travel & transportation have been the key verticals for the Indian IT-BPM industry, growing at the rate of 8 per cent,” Gurnani said.

The technology industry is growing on the transformation path to become a digital technology industry by developing its digital capabilities and reorganising itself to make the most of this opportunity, said Raman Roy, vice chairman of Nasscom. “The digital tsunami is reshaping our industry the priority is to reimagine businesses and unlock new opportunities. The Indian IT-BPM sector is emerging as a digital solutions partner for global corporations and we are excited to work across stakeholders — customers, start-ups … others to build this exciting future,” Gurnani said.