NASSCOM projects IT services exports to grow by 22 percent in 02-03

NASSCOM's annual industry survey estimates that the IT services exports
during financial year 2002-03 is expected to grow by 22 percent to Rs 35,800
crore and ITES exports is expected to grow by 65 percent to Rs 11,700 crore. The
total size of the Indian software services industry will be Rs 60,700 crore ($
12.3 billion). The domestic market is expected to grow to Rs 13,200 crore during
the year.

Speaking on the outlook for next year, Kiran Karnik, President, NASSCOM,
said, "While globally, IT budgets are expected to be flat or marginally up,
the share of software services in IT budgets is expected to increase. Within IT
services we expect to see further up-take in outsourcing due to continued cost
pressure faced by global companies. This will ensure continued volume growth for
Indian software and service companies".

The Indian software services industry will witness an increase in addressable
market in terms of new geographies, new service lines as well as higher
penetration in new verticals. Amongst the new geographies that will provide
growth opportunities for India include Germany, France and Italy in Europe;
Singapore, Korea and Malaysia in South East Asia and Chile, Mexico, Uruguay and
Brazil in Latin America. On the service lines front, IS outsourcing, application
outsourcing and systems integration will be the growth areas. Among verticals,
healthcare, retail, government, utilities and telecom service providers are
likely to increase their share in the total exports. The industry is also
expected to witness a rise in M&A activity as players try to broaden product
offerings and build scale.

According to the survey, the industry in India grossed an annual revenue of
Rs 48,000 crore ($ 10.1 billion) during 2001-02 from Rs 37,760 crore ($ 8.26
billion) in 2000-01, registering an overall growth of 27 percent in rupee terms.
The growth in dollar terms was 22 percent. Of the total revenue of Rs 48,000
crore during the last fiscal for IT software and services, exports grossed Rs
36,500 crore ($7.68 billion) of revenue while the domestic software market
contributed Rs 11,500 crore ($2.42 billion). The software exports sector
registered a growth of 29 percent in rupee terms and 23 percent in dollar terms
over revenues of Rs 28,350 crore ($ 6.2 billion) in 2000-01. The domestic
software market has grown by 16 percent in rupee terms and 12 percent in dollar
terms over revenues of Rs 9,890 crore ($2.17 billion) in 2000-01. ITES has been
the growth engine for the exports sector in 2001-02. The ITES sector grew at a
rate of 67 percent this year contributing to about 20 percent of the total
software and service exports.

Speaking about the contribution of IT to the economy, Karnik said,
"During last year, the IT industry created 92,000 new jobs and over
2,50,000 indirect jobs. The industry also paid Rs 960 crore in terms of direct
tax." He pointed out that the direct jobs are essentially white collared
jobs employing educated youths and would have typically looked for employment in
government, banks, etc. who are in the process of downsizing. The industry has
helped create wealth to the tune of Rs 90,000 crore over the past six years.

The top Indian software exporters include TCS, Infosys Technologies, Wipro
Ltd, Satyam Computers Services Ltd and HCL Technologies in that order. Some of
the mid sized companies in the range of Rs 50 crore - Rs 100 crore turnover who
are likely to move into the top slot include SSI Technologies, Visualsoft
Technologies, Ramco Systems, Sasken Communication and Sonata Software. 

Welcomes lifting of Travel Advisories NASSCOM has welcomed the lifting of
travel advisories by the US, Germany and France as a positive step towards
boosting India’s IT exports. US has been the primary market contributing
around 63 percent of India’s total software and service exports. The
announcement by the US Official State Department today follows the recent
announcements by foreign ministries of Germany and France lifting the travel
advisories to India.

As per today’s announcement, USA has lifted the earlier travel warnings and
authorized departure for U.S. Government personnel in non-emergency positions
and all family members who departed in early June under the authorized departure
have been permitted to return to India.

Karnik said, "We are delighted with this announcement since the travel
advisories were acting as a major deterrent to conduct business in terms of
delayed decision making and restricting customer visits to India. With the
announcement by these three major ICT markets, we expect the other countries
also to announce a reversal soon".

Cyber News Service