IT industry faces negative growth due to slowdown in US economy

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Bangalore, Jun 9 (UNI) The Indian IT and BPO industry, the torch bearers of the country's global business during the last decade, would suffer a negative growth between three and four per cent due to the slowdown in the US economy, NASSCOM said today.

Speaking to reporters during the NASSCOM BPO Strategy Summit, NASSCOM President Som Mittal said, ''the fundamental of the IT industry remains strong. However, various factors like slowdown in the US economy, weak US Dollar and spurt in the crude oil prices would adversely affect the country's IT and BPO industry.'' He said predictability of growth rate would be hard to forecast, but it was expected to be in the range of 22 to 24 per cent in the current fiscal.

The NASSCOM Chief said the growth had remained good till March 2008 at 29 per cent but external factors were most likely to pull it down this year. ''This slowdown will help us see the opportunities to improve efficiency and margins. In July, we will come out with firm numbers on the growth of the industry,'' he added.

Mr Mittal said the domestic market was, however, good and the hardware industry grew by 29 per cent, IT services by 29 per cent and BPO by 30 per cent.

NASSCOM Chairman Ganesh Natarajan argued that the growth rate generally remained lower in the first two quarters and then picked up during the last two. ''IT and BPO sectors, which now contribute 5.5 per cent of the GDP, will continue to serve the economy well as they are capable of meeting the targetted delivery level. But there is lot more to achieve and for this we need help from the Government and academia. Good infrastructure and abundant availability of skill is vital for this industry,'' he said.

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