Former telecom secretary R Chandrasekhar brings a no-nonsense attitude to his job as the new Nasscom president, taking charge at a time when the industry is starting to show signs of recovery. In an interview with Forbes India, he says he feels the US immigration policy may become a bigger issue this year, and expresses concern about the Indian industry’s stagnant domestic revenue growth.
Q. From telecom to Nasscom, how does the transition feel?
It has been very interesting—within the government I moved from IT to telecom and now I am back to IT in the private sector. So, in a sense, all these are interrelated and the space itself is not unfamiliar. What makes it interesting is the juncture at which the industry is poised; that’s a particularly exciting and interesting phase.
Q. There was more traffic this time at Nasscom. Are these the early signs of a recovery?
There are several factors at work, an overall improvement in the global economic climate, and in the US and leading markets that the industry serves. It contributes to the level of optimism and greater participation. There is realisation that we are not talking about IT anymore, but fundamental changes in which businesses are run. Not only is the value of what is delivered going up, but the complexity of what has to be delivered will also go up.
Q. Nasscom’s latest industry forecast predicts 13 to 15 percent export growth. What is the methodology behind the numbers?
It is based on several inputs: The business trends that companies are seeing, the size of individual deals, the deal pipelines that exist, and the challenges. Some challenges are in the regulatory environment in different markets and some are being brought on by technology itself. There are certain services that are simply fading away. For example, the call centre type of services—many of them are getting automated.
So, on one side you have growth and on the other there is change in the nature of business and regulatory challenges. But the direction of change is positive and we expect an improvement in the next year—more than 2 percent over the current year’s growth rate.
Q. Is the US immigration policy a looming concern?
It is a significant concern for us at this point. Immigration is not something that’s off the table. It is still there and could gather momentum any time during the current year. What form it could take is still unclear.
But we are emphasising that when these [US] provisions are made, what needs to be factored in is the value the Indian IT industry brings to the US economy, its companies and to maintaining their competitive edge in global markets.
Given that the relationship between India and the US has benefitted both sides tremendously, any provision that is likely to have a damaging or debilitating impact on the relationship should not happen.
Q. What is your personal agenda as the new Nasscom chief?
[The agenda is] reflective of what the industry sees. The industry has set a goal for itself to deliver greater impact in the Indian economy. Currently, it contributes a small fraction of the Indian IT industry: $32 billion out of the $118 billion [industry size] this year. And this is stagnant compared to the previous year.
Q. But there is not much that is hampering growth, as there is huge entrepreneurship.
We don’t see much that is hampering it. It [growth] is certainly not happening as fast as it could, or the country wants it to. The $32 billion remaining stagnant is not a good sign at all. This is an area where you should be seeing 50 to 70 percent growth each year. This market has not begun to be tapped. It is an opportunity and an imperative.
(This story appears in the 07 March, 2014 issue of Forbes India. To visit our Archives, click here.)