- The National Association of Software and Services Companies (Nasscom) forecast a slower rate of growth for Indian IT services in the coming year.
- The industry lobby group said the area will likely only grow between 10% and 12% next fiscal year rather than the 12.3% expected in the current fiscal year.
- Nasscom said the slowdown will push Indian IT services firms to focus on services with higher profit margins, such as digital services, data analytics and artificial intelligence, according to a Reuters report.
The slowdown will likely impact Indian IT and software services providers like Tata Consultancy Services Ltd and Infosys Ltd. The market slim down could also prompt mergers and acquisitions in companies that center their business around Indian IT services exports.
"The pressure of being competitive is forcing companies to increasingly adopt digital technologies and that again presents an opportunity for the industry," Nasscom’s president R. Chandrashekhar told Reuters.
In addition to a highly competitive market, Indian IT services firms have started to feel the pressure of potential H-1B reform in the U.S. Several H-1B reform bills are pending in the Senate. U.S. Sen. Ted Cruz wants to enact a minimum wage of $110,000 for H-1B workers, while Senators Charles Grassley (R-Iowa) and Dick Durbin (D-Ill.), want to prioritize H-1B distribution by wages, favoring firms that offer the highest salaries. Indian IT service firms are the biggest users of H-1B visa workers.