IT services companies in India are anticipating the coming year to be a challenging year for them in terms of economy, business, and politics. The IT industry in India is already experiencing a moderate growth and 2017 will be more arduous. Why you may ask? Below are five reasons indicating why 2017 may be unfavorable for the techies:
The heads of Infosys and Wipro have written to their employees regarding the serious problems to be faced by the Indian IT sector. Referring to the victory of Donald Trump and his anti-outsourcing plans, the Chairman of Wipro stated, “These questions have resulted from advancements in political area, from forces that want to sculpt the world into a point of conflict, suspicion, and exclusion and from the fast-unfolding environmental crisis.”
The anti-outsourcing plan by Donald Trump poses a huge harm to a globalized industry including IT services. The US holds up almost 60% of earnings from export of IT companies in India but consolidating of visa standards will surely increase the cost of entering into business.
Lower growth target
Nasscom has decreased IT growth target for export to 8 to 10% for 2016–2017 among global headwinds. Though the short-term economic and political fluctuations may continue for the next two quarters, challenges may be experienced throughout the year.
Quandary built by the UK’s withdrawal from the EU is other trouble for IT companies in India. Brexit will be a huge disturbance for Indian companies with conundrum appearing over their European customers.
Automation and other new technologies will be hitting revenues of IT companies in India. These elements will decline outsourcing activities, as clients will consider investments in newer technology as a substitute to Indian services.
So techies, what’s your opinion on this? Do you have any additions to the above list? Let us know your views and feel free to share your thoughts.