Further, Pradeep Agarwal expounds on the factors that cause a trade deficit. He cites, “When a country cannot produce enough to meet the needs of its population, the shortfall has to be met by bringing food in from abroad.” Adding to that the expert says, “Domestic companies make most of their production facilities abroad. This means their goods are imported when sold to the home market.”
Counting the initial effects of the trade deficit, Pradeep Agarwal Oracle says, “Initially it raises the standard of living as people have more access to a wider variety of goods. It reduces the threat of inflation as products are priced competitively. It is also an indication of a wealthy population whose purchasing power exceeds domestic production. While stressing over the lasting effects he says,
“Companies begin to progressively seek outsourcing opportunities. Along with this, local companies start going bust as domestic demand shifts to foreign-made products. Also, the country with a trade deficit creates fewer jobs, while more are created in the nations where the imported products come from.”
Taking into account the benefits due to the IT sector, the Indian software product industry is expected to reach USD 100 billion by 2025. Businesses here are centring to invest internationally to expand global track and strengthen delivery centres. In accord to this, Tata Consultancy Services announced to recruit a workforce of 1500 in the technology domain across the UK. This would result in TCS delivering efficiently to UK customers.
Considering the revenue, reports of the Ministry of Electronics & Information Technology show that in the last five years the revenue estimate of the Indian IT industry has increased around seven per cent, registered at USD 151 billion in FY2017-18 which was USD 141 billion in FY 2016-17. As per the reports, the IT services exports accounts for the largest share of 57 percent of about USD 86 billion. Also, software products and ER7D emerged as the second-largest segment with 21.8 per cent share followed by BPO exports contributing 21.2 per cent.
According to the Central Board of Indirect Taxes and Customs (CBIC), the clarification on the scope of intermediary services ensures the exports of R&D in software, business process, management and IT services are not denied ‘export status’. This will add to the boost of the Indian IT industry, in view of the fact that the GST refunds will be smoother.
India is the paramount offshoring terminus for IT companies across the globe. “Having proven its competencies in delivering both on-shore and off-shore services to clients across the world, rise in the technologies offer an entire spectrum of possibilities and opportunities to top IT firms,” concludes the expert, Pradeep Agarwal, Oracle senior director.