The global economic slowdown has put a spanner into what can justifiably be called the locomotive of India's growth story. From next to non-existent in the 1990s, the information technology (IT) and IT-enabled services sector is now the country's single largest exporter and top foreign exchange earner.

In FY15, net IT exports were at $70.4 billion, up 12 times since 2000-01 and growing 19 per cent a year. Last financial year, the IT industry's forex earnings financed 49 per cent of the country's deficit on merchandise trade.

Experts say the sector was able to generate substantial forex for the rest of the economy to invest in capital and import-intensive sectors such as power, metals and infrastructure among others. Being a labour-intensive and relatively high-paying sector, the sector fuelled urbanisation and demand for high value consumer goods and services, including cars and homes.

"The equation was simple. We would run $10-12 billion worth of deficit on merchandise trade and earn $9-10 billion a month from services exports, mostly from IT. The equilibrium was first hit by a run-up in crude oil prices and gold imports, and now it faces a risk from a sharp slowdown in IT exports," says G Chokkalingam, chief executive officer, Equinomics Research & Advisory.

This has put another block on India's high growth aspirations. IT exports are now growing in single-digits, as customers in the developed world cut on IT spends forced by lower growth.

The outlook remains subdued. According to technology consultant Gartner, global IT services grew only 1.9 per cent in 2014 and the demand is likely to shrink 4.3 per cent in 2015, making it tough for Indian IT vendors.

"Faster growth requires rapid rise in investment and consumption, which in turn leads to higher imports that needs to be financed. Between 2000 and 2005, the bulk of dollars for the spike in import came from the IT sector, allowing almost cost-less growth," says Dhananjay Sinha, head institutional equity at Emkay Global.

Thanks to IT exports, India's current account deficit turned surplus in 2001-02, the first time in 25 years, and remained in positive territory for the next three years. This translated into stability on the external front, including the rupee-dollar exchange rate. This attracted foreign capital, setting the base for high growth during 2003-2008.

Most of the country's top manufacturing and infrastructure companies are net importers, except pharmaceutical and agrochemicals players. A strong export engine is necessary for companies to fund their import bill for energy, industrial raw materials, capital goods and technology necessary for growth and investment. Forex is also required to fund consumer goods imports, which have been normally growing in double digits.

Slowing IT export would make it tough for India Inc to ramp up capex, unless other exporting sectors such as pharma and auto pick up the slack. This looks tough, given their small size and capital-intensive nature compared to the IT sector. "Pharma exports could be potentially as big as IT but it is up against drug regulators in the developed world, besides competition from big pharma companies in the US. The automobile sector is highly crowded, with companies from every major economy competing for a slice of the global market. In contrast, IT companies have few barriers," says Chokkalingam.

In FY15, pharmaceuticals, basic chemicals and cosmetics accounted for 8.8 per cent of merchandise exports and 5.8 per cent of all goods and services exports, respectively, a third of the IT services' share. The corresponding ratios for transport equipment were 6.9 per cent and 4.5 per cent, respectively. In the near to mid term, a slowdown in IT exports would raise India's dependence on capital flows to fund capital and consumption import. Capital flows, however, are cyclical and come at the cost of volatility in exchange rate and capital markets, as has been the case since the 2008 financial crisis.

It's not biting right now because a slump in international commodity prices has led to a cyclical fall in India's import bill but any uptick in domestic or international growth would reverse the cycle, creating macroeconomic problems unless exporters oblige.