Tech industry growth projected to halve to 3.8% in FY24 compared to FY23

India's technology industry is projected to have earned $253.9 billion in revenue in Financial Year 2023-2024 (FY24), marking a slower year-on-year (Y-o-Y) growth rate of 3.8 per cent, according to a report.

While citing the Annual Strategic Review report of the National Association of Software and Service Companies (Nasscom), said the industry’s growth projection has slowed to a lower single-digit figure compared to the 8.4 per cent forecasted in FY22. 

This slowdown in FY24 is attributed to delays in deal closures, uncertainties arising from tech budget reductions among customers, layoffs, and macroeconomic challenges.

Sources reported that in FY24, the industry is expected to generate an additional $9.3 billion in revenue, spanning across information technology (IT) services, business process management, hardware, software products, and engineering services.

Indian technology companies, particularly IT services firms, are under pressure as they depend on markets such as North America for over 60 per cent of their revenue and that region is experiencing an economic slowdown.

Sources reported that the global technology spending growth rate has dropped from 8.2 per cent in 2022 to 4.4 per cent in 2023.

However, spending in artificial intelligence (AI) technology experienced a 30 per cent growth in 2023, amounting to an estimated expenditure of around $130 billion.