Nasscom rules out dramatic uptick in IT demand in 2014

Says outlook for the year positive and direction of change to be upward

While demand for the Indian information technology (IT) sector is likely to improve in 2014, there might not be a 'dramatic' rise from a year before, industry body National Association of Software and Services Companies (Nasscom) said on Tuesday.

“Qualitatively, we expect demand to be better. But it is not going to be a dramatic step-up,” said Nasscom president R Chandrashekhar. “But, definitely the outlook is positive and we do see the direction of change will be up, not down. However, it is too early to say how much.”

Chandrashekhar, a former Union government telecom secretary, was appointed Nasscom's president last week.

After two years of tepid growth in demand, analysts and observers expect revival in 2014. With signs of economic recovery in the key US and UK markets and also based on interactions with clients, large and mid-size IT services companies have said 2014 would be a better year.

This has kept investors interested in the sector over recent months. “Demand has historically been the key variable driving the sector. With signs of a pick-up, we remain positive (on the sector),” Citi Research had said in a recent report.

Moreover, Chandrashekhar said, Nasscom had “spent time and energy” in trying to convey the industry's concerns over the US Immigration Bill, which proposes higher visa fees and enhanced scrutiny by American agencies.

“We have tried to put across the contribution of the Indian IT industry, which is not only contributing to the competitiveness of the American industry but a significant employer in that space,” he said. “I believe there has been a kind of a fairly receptive hearing and the rationale of what we are saying has been understood.”

The Bill has been a cause for concern in the sector and its final shape is being closely watched. Chandrashekhar said Nasscom was “quite hopeful” that it would be “practical and meaningful” in its final form for Indian IT.

Nasscom chairman Krishnakumar Natarajan said, in its 25th  year the industry body planned to reinvent itself and expand focus to leveraging business opportunities for Indian companies, rather than only policy advocacy.

“We are reinventing Nasscom to evolve into being a market creator, not just an organisation influencing policy,” said Natarajan, also the chief executive of mid-size IT firm Mindtree. “In the next stage of reinventing Nasscom, we need to be more than just a policy advocacy organisation, to say how we are going to create and leverage opportunities.”