Source: istockphoto.com

According to the president of India’s top trade outsourcing organization, National Association of Software and Service Companies (NASSCOM), the country is expected to reel in revenues from offshore outsourcing representing single-digit growth in the fiscal year ending March 31, 2010.

This projected growth is short of the 14-16% growth in outsourcing exports for the year ending March 31, 2009. More significant is the fact that it is much lower than figures obtained for the year 2008 - exports spurred growth in the industry to a whopping 29 percent. The exports in question refer to Indian services done for overseas customers. These customers were billed in their respective foreign currencies and the money was remitted back to India, cites IDG News Service.

The outsourcing industry in India has been hit badly by a delay in final outsourcing budgets by clients. Som Mittal, who is the president of NASSCOM said Tuesday that the considerably slower growth in major markets, i.e. the U.S., were also factors in a decline in annual growth in outsourcing exports.

According to preliminary forecasts, the trade body had said that growth in terms of export revenue would range between 7-12%. However, Mittal feels that is likely to be less than  10% at this point. Approximately 60% of outsourcing exports for India stem from Europe and U.S., with the latter having the biggest share of Indian exports. India’s outsourcing sector provides software development as well as IT services along with business outsourcing (BPO), design and engineering services.

Mittal continued to explain that clients abroad are trying to slash prices in the wake of a recession. Some of these customers are launching benefit-sharing initiatives designed to cut outsourcer revenue from contracts. Apart from that, as outsourcers commit to more work being done from Indian (offshore), as opposed to onshore client locations, a big chunk of the revenue is taken out, reports pcworld.com.