US recession not jeopardising Indian IT sector

New Delhi, June 11 (UNI) With the US slowdown affecting the country's IT sector marginally, industry experts are of the view that the sector has strong fundamentals to sustain in the long run and its large portion is still untapped.

The whole world is affected by the US recession and India is no exception, National Association of Software and Services Companies (NASSCOM) said in a study.

Nasscom Chairman Ganesh Natarajan said, ''We must look at the next three to four years rather than focus on the next one year. We have strong fundamentals to sustain us in the long run.'' The premier trade body in the country's IT sector expected that the IT and BPO sectors will grow at 23 to 24 per cent as against last year's 29 per cent.

Talking to UNI, Trend Micro India Pvt Ltd Manager Niraj Kaushik, ''The US recession is undoubtedly affecting the IT sector and there is slight slowdown. However, a large portion of the market is still untapped.'' There are opportunities to grow in each and every segment of this sector, Mr Kaushik said. ''It is the way how you look at it.'' He is of the view that the major cause behind the slowdown is the uncertainty in the global economy and frequent fluctuation in dollar that play a major role in IT and related industries.

Meanwhile, the study reveals that the BPO sector is now seeking for tier-II and tier-III cities to expand the business.

It said the industry is also seeing an impact of spiralling prices of deals and increasing pressure of salary hike as the clients are not ready to pay more as against their earlier deals.

The premier body said India is now looking for new areas to explore new outsourcing opportunities especially in New Zealand, Australia, European Union and Japan on account of recession in the US economy which has resulted in declining outsourcing revenue.

The IT sector will get 40 per cent of revenue from the new deals while it has got 60 per cent earning from the existing deals.

The US share has dipped in terms of total earning from 69.40 per cent in FY04 to 61.40 per cent in FY07.

On the other hand, the contribution of European market has grown up to 30.10 per cent FY07 from 22.60 per cent in FY04.

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