Indian IT sector would witness low single-digit growth in FY25: Nasscom

CIOTechOutlook Team | Tuesday, 25 February 2025, 11:27 IST

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The Indian IT industry is anticipated to grow by 5.1 percent to $282.6 billion in FY25, up from the 4 per cent growth in FY24. Nasscom stated that the sector was likely to surpass the $300 billion revenue milestone in the FY26.

Nasscom President Rajesh Nambiar said the growth trajectory was on the right path. In FY24, growth was 4 per cent; in FY25, it is expected to be 5.1 per cent, and if the industry achieves the $300 billion target, the growth rate would be around 6 per cent.

The industry added 126,000 new jobs in FY25, which will take the overall employment to 5.8 million. While the industry body did not provide hiring targets for FY26, Nambiar said the industry would continue to expand its workforce.

“India’s tech skill intensity will be a critical driver of future growth. While the CEO outlook for FY26 remains measured yet positive, with increased tech and artificial intelligence (AI) spending, sustaining the growth momentum requires a strategic vision. However, upskilling in niche and core tech areas will continue to remain of paramount importance for the industry.”

Nambiar said the US market that constitutes almost 60-62 per cent of the Indian IT services revenue, would be the biggest headwind for the industry owing to the tariff threats made by President Donald Trump.

“If you were to look at the headwinds, the biggest unknown there would be the tariffs and the impact of what happens in the US market. It is a bit of a wild card at this point of time,” said Nambiar.

Infosys CEO and Managing Director Salil Parekh said if the measures taken by the US benefit US companies that should augur well for the Indian IT industry.

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