SENIOR FIGURES in India’s IT industry said that 2018 would bring improved fortunes for the industry off the backs of a strengthening US economy, and increased demand for technology solution.
According to V. Balakrishnan, the former CEO of Indian tech giant Infosys, the strength of one of the world’s biggest economies is helping to fuel the return of the Indian economy from what has been a lackluster year.
“[The] US economy is doing extremely well. I think they are still growing 2-2.5 percent — a good growth for that economy,” he told Press Trust of India (PTI), as reported by The Hindu Business Line.
He said a recent Gartner report noted that overall IT spending would rise 4-4.5 percent in the coming year, and that Indian firms would do well to “take on growth” opportunities that are available.
According to Balakrishnan, the potential rise in US interest rates could be a signal of the country’s strengthening economy and employment rates. Both could serve as good omens for India’s technology scene. Since Prime Minister Narendra Modi’s polarizing demonetization plan was executed last November and a consumption tax this summer, India’s economy has been rocky as exports and GDP rates have fallen.
The effect was especially pronounced for India’s technology scene, which saw the specter of US President Donald Trump and his protectionist policies emerge at the forefront of the global discourse around foreign labor. Infosys is one of a handful of major Indian companies responsible for feeding much of the US’s thirst for tech talent.
Infosys was hit especially hard when Trump issued changes to the US’s H-1B visa policy, which is responsible for granting permission for economic migrants.
Infosys has been seen as a bellwether for India’s technology scene, as well as for nationwide barometers of corporate governance. The company recently lost its CEO Vishal Sikka due to infighting with Infosys’ founders.
Improvements in the market’s macro indicators could do a world of good for India’s lagging economy. India’s National Association of Software and Services Companies (Nasscom) projected that the industry was expected to experience seven to eight percent in terms of export growth, while the domestic market – which fuels the bulk of the economy – was set to improve by 10 to 11 percent.
“It looks okay for the year,” Balakrishnan said according to The Hindu Business Line. “But I think the next year should be good if the US economy continues to do well.”
Former Infosys CFO T.V. Mohandas Pai said that analyst reports on the US economy matter because it could signal that more and more work has become complex enough to warrant the return of more work for “big system integrators.”
“I spoke to industry people and they say digital work for all big companies is growing in double digits. The rest of the traditional business is not growing much,” he told The Hindu.
“Digital is growing very rapidly, and for the big fellows, digital is 20-25 percent of the business. So I think there is good growth.”
Furthermore, as the annual global business spend on IT infrastructure continues to rise, it could prove positive for countries like India who export talent and service.