India’s outsourcing industry lobby group has cut the fiscal 2016 growth forecast by 2%, saying the global services industry is going through a transitional phase.
Revenue will likely grow between 8% and 10% in constant currency terms in the fiscal year ending March 2017, said the National Association of Software and Services Companies (NASSCOM). In a projection made earlier this year, the lobby group had projected 10% to 12% growth for the fiscal year.
“The industry is going through a transient phase with various domestic and global factors impacting its performance,” said Nasscom President R Chandrashekhar in a statement.
“While the effect of various short-term factors may show for a couple more quarters, the worst is behind us.”
Industry analysts attribute the lower growth to a variety of factors, including the changing technologies, Britain’s exit from the European Union, and the rising political heat in the United States.
The lobby group has warned its member firms that the world is investing in the future, adding that the next wave of growth will come from new technologies like advanced analytics, social media, cloud, and mobility.
“To stay globally competitive, the need of the hour for Indian firms is to invest in the future and enhance their digital capabilities. This entails a mix of reskilling, domain and platform capabilities coupled with acquisition led competencies.”
The announcement comes after the country’s top information technology firms reported muted growth numbers for the second fiscal quarter, with Infosys cutting the revenue forecast for the second time in three months.
With more than 3.5 million employees and annual revenue of close to $150 billion, India’s outsourcing firms dominate the global services industry.