Growing Pains for India's Tech Industry


An interesting look at India's tech industry, which is experiencing a slowdown in its rate of growth.

Some of the factors are (we hope) relatively short-term problems, including the woes of the global financial business (a major customer of India's outsourcers) and the weak dollar. But there are signs as well of deeper challenges: "Competition is rising from other low-cost nations, ranging from Eastern Europe to the Philippines and Vietnam. And India's own success has raised labor expenses, cutting into the companies' low-cost advantage just as their revenue growth is slowing."

One way forward for India's tech giants is the development of new products and services. But IT outsourcing ($23.1 billion) and business process outsourcing ($10.9 billion) still dwarf software and other products ($6.4 billion) in terms of current revenue for Indian companies.

The WSJ quotes Nasscom President Som Mittal: "The first round of growth is always easier. The next 10 years is going to be different."

Related: Nasscom says "the next decade will play a crucial role in bringing about disruptive growth for the Indian Software Product segment."


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