Uncertainty on the visa front is the main challenge for India’s Information Technology sector in 2017-18 but it’s going to be business as usual otherwise, said industry veteran Kris Gopalakrishnan. “The challenge mainly arises because of uncertainties on the visa front (emanating from US),” the co-founder and former CEO of Infosys told media in an interview, discussing prospects of IT industry in the new financial year. “That’s one challenge I see. I don’t see anything particularly different this year except for the visa issue. Everything points to a steady growth for the industry,” said the former President of the Confederation of Indian Industry.
“If the global GDP grows around 2-3 per cent, (global) IT investment will grow around 3-5 per cent and Indian IT will grow about 4-5 per cent higher than that. So, it (Indian IT industry) will grow around 9-10 per cent (in 2017-18).” He said the current fiscal is not going to be the most challenging for the IT industry, noting the financial crisis in 2008 had brought the growth rate to almost zero then.
In the era of digitisation, Indian companies are moving in that space, where new firms are also emerging. Clients and the industry are increasing investments into some of the new technologies, he said. Hiring in the IT sector has come down because of slower growth rate, and increasing automation on some types of services such as infrastructure management and testing, he said.
On salaries of entry-level IT engineers not seeing hike in recent years, Gopalakrishnan said it’s a function of supply and demand, and the industry had a large supply and so the salaries are modestly growing. He said Indian IT engineers also need to move into user industries such as retail manufacturing, healthcare and financial services which require larges-scale IT deployment.
They also need to look at opportunities such as those in product companies and firms providing services on the cloud which require “unique and specialised skills”. He did not agree with perception in some quarters that India is “pleading” with the US on the visa issue.
“This is a trade issue. We have certain strengths which we need to leverage. Services is our strength. Having said that, we need to look at new models, we need to look at how the industry can transform. I see this happening. Lot more US companies are setting up IT operations in India. So, the companies are shifting to India,” Gopalakrishnan said.
There have been apprehensions that under the new administration in US, there may be a clamp down on H1B visas which can hurt Indian IT industry. The US is the largest market for Indian IT-ITes firms.
H1-B is a non-immigrant visa that allows US companies to employ foreign workers in speciality occupations that require theoretical or technical expertise. Technology companies, including those from India, depend on it for hiring tens of thousands of employees each year.