Europe to drive 2014 growth for Indian IT firms
Europe's increasing demand for outsourcing services will provide a boost to the Indian ICT sector next year, with new projects expected from the region.
North America currently contributes more than 60 percent of IT exports in India, while Europe accounts for 20 percent, the bulk of which is driven from the United Kingdom. Demand from the European region, though, has been climbing, according to Indian IT industry group Nasscom.
"Europe is growing faster than the U.S.," Nasscom President Som Mittal said, in a report by The Economic Times. "That is something we saw this year and this will only gain momentum. There is a lot of latent demand in the region, which will drive growth for the sector."
Adding that European companies were now more open to outsourcing, he said: "In the coming year, we will see a lot of new projects coming up, which is a huge opportunity for our domestic companies... For European companies, many of them which have seen prolonged economic slowdown, Indian IT firms not only offers cost advantage but also high quality of work."
Indian tech vendors also have been beefing up their presence in the European region after the U.S. proposed changes to its immigration laws, which Nasscom had said discriminated against Indian organizations.
"The companies are bullish on the European market, which is evident from the acquisitions that some of them have made in the recent past," Mittal said.
Mumbai-based IT services company, Geometric, in January bought German company 3cap Technologies for US$15 million, while Cognizant acquired six companies from Germany's C1 Group. Both countries in April also signed an agreement to help boost skilled worker immigration, where German would be promoted as a foreign language in India as part of efforts to drive the export of local IT workers to the European market.
According to Nasscom's estimates, India's IT exports will reach US$86 billion in the current fiscal year ending March, growing 12 to 14 percent from the previous year.