However, according to the IT-BPM sector’s apex association, Nasscom, the IT sector added a little over 600,000 employees in the past three years and was expected to add 2.5-3 million jobs by 2025. “However, the skills profile is set to undergo a rapid change, as demand for skills around digital technologies grows exponentially,” the Survey said.
Labour Bureau of India data says the change in sectoral employment during April to December 2016 was only 22,000. “Thus, there is a gentle deceleration in net hiring growth rate, as also indicated by Nasscom,” the Survey said.
Listing key challenges for Indian IT-BPM, it mentioned increased oversight and enforcement actions on the work visa regime in the US, competition from new players in Eastern Europe and lack of skilled personnel in digital technologies. The IT-BPM industry is also feeling the pinch of global slowdown and political uncertainties, with clients going slow on decisions and investment processes.
“Misconstruing mobility of skilled people as an immigration issue is a deterrent to the growth of this global business, resulting in many barriers to free movement of skill and data in the major markets,” the Survey said. It gave examples of the US, the UK and Australia undertaking various changes in their work visa programmes to protect the interest of local workers.
The Survey also highlighted the increasing competition that India faces from new “digital only entrants” from Eastern Europe and Latin American countries, including newer companies like Globant, EPAM, and Luxoft.
“Indian service companies gained scale over the past decade as the disrupters, creating the modern offshoring industry. But, they are now the incumbents, challenged by a slew of specialised and niche start-ups bred in this new environment.”
It also pointed to domestic challenges like shortage of skilled digital talent, underdeveloped infrastructure in Tier-II and Tier-III cities, and some restrictive regulations for product start-ups.
The Survey also raised a point about lack of reliable estimates on employment in recent years that impede its measurement and creates problems for the government in appropriate policy intervention.