Indian IT industry has been an eye candy of the Indian economy for long. But lately the scenario has changed, in the last financial year, in the first three-quarters, the performance of top three IT companies namely Wipro, TCS, and Infosys has been on the lower side. The fourth quarter brought some hope for TCS, but the investors are feeling bullish. These companies which have made a significant mark in the global IT arena are now struggling for their positive returns. Many of the conditions like slowdown of the global economy, tough competition, attrition and others have curtailed the growth of IT industry in India.

 

 

 Some of the problems faced by IT industry is as given below:

  1. TCS, Wipro, and Infosys have recorded a growth of 8 to 9% in terms of dollars in 2016. This was against a two-digit growth predicted by NASSCOM.

  2. Western countries are the key market of India in IT sector and hence a slowdown in the economy in Western countries has slumped the growth of IT sector in India.

  3. TCS was slammed with $10 million as a penalty in U.S.A for alleged use of a proprietary software from a company called Epic.

  4. Infosys was accused of violating visa and immigration rules in U.S.A.

  5. The above-stated things have a negative impact on the image of Indian IT industry in the global market.

  6. The global IT services sector is shifting from a BFSI (Banking and Financial Services Industry) and telecom oriented sector to other verticals like healthcare and retail. India depended 40% to 50% on BFSI and telecom for its bread and butter. The healthcare and retail IT services sector is dominated by MNCs and Indian IT companies are facing a tough competition from them.

  7. The IT expenditure has not picked up in U.S.A due to slow economic recovery and Europe is facing its own problems. This has negatively affected IT projects outsourced to India.

  8. The global competition in application development and maintenance, which is the traditional arena of Indian IT industry has also lowered the growth in Indian IT sector.

  9. Retention of talent in Indian IT companies remains a long-standing problem and needs to be effectively addressed.

  10. The new H1B Visa issue and the new policy changes made in U.S will also affect the IT sector in India.

 

Measures to be taken to tackle the problems faced by IT industry are:

  1. The leading IT companies need to revamp their business models to face the challenges of global economic slowdown.

  2. The IT giants in India like Wipro, TCS, Infosys and others must take productive steps to improve their image in the global arena.

  3. To tackle the problem of competition from MNCs in retail and healthcare sector, the offshore business models must be re-evaluated and made more innovative and productive in the IT companies.

  4. The governments in U.S.A, U.K and other Western countries must take policy decisions to revive the slowdown of their economies, which would benefit the entire world.

  5. The Indian IT companies must expand to other fields of expertise like Cloud Computing, Big Data, Research & Development and other related fields and should update themselves in providing IT services to Retail, Healthcare sector, Science & Technology, Robotics, Space Research and other such fields. This only can ensure their survival.

  6. Luring employee perks, mentor programs, skills training, company benefits and other such measures can be taken by Indian IT companies for employee retention and for attracting good talent to companies.

 

India still remains a force to reckon in global IT arena. Indian IT exports make a large chunk of total exports from India. Last year out of the $260 billion exports from India, $150 billion comprise of IT exports. Indian IT sector has crossed various hurdles like the transition to Y2K, minimum alternative tax, and global financial crisis and still stands strong like a mammoth in the difficult times.