London: Growth in India's information technology sector will slow due to a Western slowdown but should still reach 22 to 24 per cent this financial year against 28 per cent last year, the president of India's National Association of Software and Service Companies (NASSCOM), Som Mittal said.
Mittal told Reuters domestic growth of 28 to 30 per cent in the industry would help support the sector, which now employs some 2 million people across India.
"When we look at this downturn we think it is probably shallow at this point," he said in a telephone interview. "Based on what we have seen from companies so far we still think we will have growth of 22 to 24 per cent, down from 28 per cent."
A downturn in Western Europe and the United States have an overall mixed impact on India, he said, which has seen technology sector employment improving on the back of outsourcing from foreign firms keen to cut costs and access new markets.
"In downturns companies tend to outsource more to save costs but they tend to expand less," he said. Employment in the sector would likely grow around 20 per cent in the current financial year to April 2009, he said.
NASSCOM estimated total software and services revenues last year at $64 billion. He said the Indian information technology sector was facing mounting competition from other rivals such as the Philippines, which also had good infrastructure and good English skills -- but that Indian firms were also expanding into both emerging and established markets in at least 28 countries.
That ranged from offices in London to access markets there, as well as Eastern Europe, such as Poland and the Czech Republic, and Egypt to access the European time zone at lower cost. Indian companies were also looking at Russia and China as outsourcing destinations to target those markets, he said.
"The dynamics are changing," Mittal said. "There will be more competition as well, which I guess is inevitable." Last month, the head of computer maker Hewlett-Packard said he saw Africa -- where his firm's sales were rising 25 per cent a year -- rivalling India within a decade for information technology outsourcing. Mittal said African growth was likely.
"I think it will happen because the costs of being in places like Eastern Europe are going up, then if you want to be in that time zone Africa is a real possibility," he said. India's Supreme Court said in February that Mittal, formerly managing director of Hewlett-Packard GlobalSoft, would be prosecuted for allegedly giving inadequate security to a female employee killed travelling home after work.
Pratibha Srikanth Murthy, an employee of Hewlett-Packard's Indian division, was being driven home in a company taxi after finishing her nightshift in Bangalore in 2005 when her driver raped and murdered her.
The state government was prosecuting Mittal under a law governing employee safety. "I cannot talk about that individual case because it is sub judice but more broadly across the whole industry there have been a few stray cases that have happened," Mittal said.
"We are trying to work with governments to improve the law and order situation and make sure that companies provide as good security as possible to their staff."
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