The Indian IT-ITeS sector, which exhibited sterling performance over the last 4-5 years, is now facing tough times. But there is nothing fundamentally wrong with the sector, and the future holds promise.

The purple patch of the Indian IT- ITeS sector has somewhat faded in recent months. Since last year, the industry is facing a lot of adversities. The global recession, economic downturn, subprime mortgage crisis and the domestic factors such as the rupee appreciation and inflation have adversely impacted the Indian IT sector. Further, in more recent times, fears have cropped up with the election of conservative Barack Obama of the Democratic Party as the US President, who is more hostile to outsourcing of jobs to India. In addition to that, impending elections at home and abiding limitations of the Indian economy, such as poor infrastructure and lack of skilled employees, are also creating chaos in the industry. As the industry moved into 2008, these unpleasant factors strengthened further, and the IT industry, during the whole year, has faced huge enigma in managing business, as there were huge employee and wage cuts, and many companies have started shifting their focus to other nations.

According to industry pundits, given the current situation, IT industry will witness growth slowdown this year, but companies feel they will be in a position to take advantage of the next growth cycle. Speaking at the India Economic Summit, organized by the World Economic Forum (WEF) and the Confederation of Indian Industry (CII), Infosys Technologies Executive Co-Chairman Nandan Nilekani has commented that the growth achieved by the IT sector in the last 4-5 years will not be repeated this fiscal due to the current economic crisis across the globe. He has further added, "There's a global scenario which is unprecedented and it'll have an impact on everybody. But time and again, the industry has demonstrated that it's resilient enough to deal with the harsh challenges."

According to the Analyst 500 ranking of 2008 based on Net Sales, TCS topped the league chart with a 25.33% increase in net sales vis-a vis the previous year. Wipro and Infosys occupied the second and third places with 27.98% and 20.78% increase in net sales respectively.

IT-ITeS Industry, World Economic Forum, WEF, Indian Industries, Nandan Nilekani, TCS, Lehman Brothers, Merrill Lynch, BFSI segment, Indian IT-BPO sector, Financial services companies, Financial sector business, Insurance sectors, Mergers and Acquisitions, M&A.