Tech industry revenues decelerated sharply in FY24 in India

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India’s GDP might be leaving other countries behind in terms of growth rates, but the technology industry, one of the sunrise sectors, is estimated to have earned revenues of $253.9 billion in FY24, thereby registering an annual growth rate of 3.8%, media reports said.

The stark slowdown in the just concluded year was attributed to delay in clinching major deals, tech budget reduction among customers and sundry macroeconomic challenges.

Quoting an annual strategic review report of the National Association of Software and Service Companies, Moneycontrol mentioned that the tech industry’s growth projection decelerated to lower single-digit figures.

The report also stated that the industry was estimated to record an additional revenue of $9.3 billion across domains such as IT services, management of business processes, software products, and engineering services.

The economic slowdown in the US, which generates more than 60% revenue of the Indian IT industry, proved to be a key bane for the entire tech sector. The report said that growth rate of global tech spends has dipped from 8.2% in 2022 to a mere 4.4% in 2023. The only sub-sector that witnessed considerable growth is artificial intelligence, having registered a 30% rise that involved an estimated absolute expenditure of about $130 billion.

“The future of the country is tech driven. Overall, we are number one as a global sourcing hub at $250 billion revenue. Nearly 90% of the Fortune 500 companies are customers of Indian tech companies. We are a significant contributor to India’s GDP… though this year has been slightly slower for the industry,” said Rajesh Nambiar, who is the chairperson of Nasscom and the CMD of Cognizant India.

The tech industry was expected to create about 60,000 new jobs in FY24, thereby taking the total employment to 5.43 million. However, this number of employee addition during the year is just a fraction of the 270,000 jobs the sector added in FY23.

In keeping with the focus and surge in expenditure, the bulk of the hiring is veering towards AI, cloud, big data and cybersecurity, Nasscom president Debjani Ghosh told the portal.