MUMBAI Export growth from India's IT outsourcing sector is set to accelerate in the fiscal year starting in April, an industry lobby group said on Tuesday, as hopes rise that an improving global economy will drive demand.
The sector's exports are expected to grow between 12 and 14 percent in 2013/14 to as much as $87 billion, according to the National Association of Software and Services Companies (Nasscom).
Exports were estimated to have grown 10.2 percent to $75.8 billion in 2012/13, Nasscom said, slightly lower than expected as corporations in its biggest markets, the United States and Europe, cut back on IT spending due to global uncertainty.
Nasscom had said in November that exports would reach the lower end of an earlier forecast of 11-14 percent. That compares with growth of about 16.3 percent in the previous year.
Strong December-quarter results from second-ranked Infosys and its peers, including top-ranked Tata Consultancy Services, prompted investors to look for an increase in technology spending in the coming year.
"For the foreseeable time, the increase in (IT) spending will continue," said Nasscom Chairman N. Chandrasekaran, who is also the Chief Executive at TCS.
While many analysts said the forecast was in line with their own estimates, some were cautious.
"The estimates look optimistic, given only slightly better-than-expected numbers in the December quarter. Nasscom always tends to revise estimates over the course of the year," said Ankur Rudra, an analyst with brokerage Ambit Capital in Mumbai.
He expects export growth to be towards 11 to 12 percent.
Several of the world's leading economies are showing signs of improvement while the euro zone has stabilised, an indicator compiled by Organisation for Economic Cooperation and Development suggested.
Separately, Moody's Investor Services on Tuesday said downside risks for the global economy had receded in the past three months, though a number of dangers still remained.
Nasscom said the $108 billion sector now had an employee count of 3 million after adding 188,000 people in the current fiscal year.
(Additional reporting and writing by Aradhana Aravindan; Editing by Richard Pullin)