Software exports to touch $10 bn by 2002

Software exports to touch $10 bn by 2002
Narayanan Madhavan

NOV 22: India's software association said on Tuesday it expects industry exports to hit $10 billion in 2002, up from the current level of around $6.0 billion.

Dewang Mehta, president of the National Association of Software and Service Companies (NASSCOM), said the exports, which include software-based services, were targeted to reach $9.5 billion in 2001/02 (April-March), and cross the $10 billion mark in the calendar year 2002.

"If the physical infrastructure improves we can do it much earlier," he told a news conference. Software exports crossed $4.0 billion in 1999/2000, and are estimated at $6.3 billion in the current fiscal year, and are expected to grow roughly 50 percent every year and to reach $50 billion in 2007/08.

India's information technology services industry has been growing at a scorching pace in a global boom, but its focus within the sector has been changing from the days when it provided cheap professionals or Year 2000 (Y2K) services.

Mehta said E-commerce solutions for Internet firms were expected to account for $2.17 billion in exports in 2001/02, up from $1.4 billion in the current year. Computer networking and wireless Internet technologies were also emerging as key areas in which Indian firms are boosting business, he said.

The industry has also been pushing hard to increase the number of graduate engineers produced by the country, whose professionals are being courted by the United States, Britain, Germany and Japan with liberal visa regimes.

Mehta said Nasscom would unveil next week a plan to ramp up the annual output of engineers produced by India's educational institutions to 500,000 by 2006 from the current 178,000. Of the current figure, 92,000 account for those qualified in information technology-related disciplines.

The industry has set a detailed roadmap for targets until 2008 so that it could identify bottlenecks and sort them out early, Mehta said. The association will announce a task force on research and development to develop original technologies in India at its annual Nasscom 20001 conference next February in efforts to transform the industry to high-value activities, he said.

Nasscom said it expected venture capital and private equity commitments aiding the information technology sector to cross $14 billion in 2001/02, up from $6.95 billion in the current year. The figures are overall valuation-based estimates, and the actual inflow would be much lower, Mehta said.

Nasscom said in a statement that the domestic industry was expected to grow in revenue to $37 billion in 2007/08, up from $3.5 billion in 2001/02.

Home IT spending to surge in India: Spending by Indian households on information technology, particularly computer hardware, is set to surge 55 per cent in the current fiscal year, the International Data Corp (IDC) said. IDC, in a statement received by Reuters late on Monday, said there was a clear shift in IT spending towards home use and away from spending by larger firms.

IDC said households, together with small- and medium-sized businesses, would drive domestic IT spending, which was expected to top Rs 21,000 crore ($4.5 billion) in 2000/01 (April-March), up from an estimated Rs 16,540 crore the previous year.

IDC said its "Map-IT 2000" survey of households and commercial establishments in 25 Indian cities estimated IT spending by households would grow 55 percent in value to account for 14 percent of the total market, up from 11 percent in 1999/2000.

Although IT purchases by small- and medium-sized businesses would show a 25 per cent growth in value in 2000/2001, the sector's market share would fall marginally to 44 percent from 45 percent, IDC said.

The market research firm estimated that the spending share of large units with 50 or more employees would drop to 29 percent from 31 per cent the previous year.

Spending by government, educational and research bodies was expected to hold steady at 13 percent of the overall figure, the statement said. IDC said the advent of increasingly cheaper personal computers and modems to enable Internet dial-up would keep the focus of household IT spending on hardware.

Industry officials say Indian homes more likely to purchase personal computers as prices fall closer to the levels of colour televisions. The numbers of personal computers in India stood at around 4.3 million at the end of 1999/2000, and the hardware industry expects an additional 1.9 million units to arrive 2000/01. Cable television currently reaches some 40 million households.