Financial Daily from THE HINDU group of publications
Wednesday, Jun 04, 2003
Industry & Economy - Exports & Imports
Software exports up 26% in 2002-03
Mr Kiran Karnik, President, Nasscom, with Mr S.N. Zindal, Director-General, Software Technology Park of India, addressing a press conference in the Capital on Tuesday.
NEW DELHI, June 3
SOFTWARE and service exports from India during 2002-03 grew by 26.3 per cent (in rupee terms) to Rs 46,100 crore compared to Rs 36,500 crore in the previous year, according to the National Association of Software and Service Companies (Nasscom).
In dollar terms, the industry clocked a growth of 25 per cent to $9.5 billion. Though Nasscom had earlier projected a growth of around 30 per cent for the industry in 2002-03, appreciation of the rupee coupled with lower technology spending due to the prevailing economic slowdown pulled down the growth, the Nasscom President, Mr Kiran Karnik, said here.
For the current fiscal, Nasscom has projected a growth of 26-28 per cent for the industry, leading to revenues of over $12 billion. Of this, IT services, products and technology services would account for about $8.4 billion, growing at 17 per cent, while the ITES-BPO segment would rise by 54 per cent to turn in the balance.
"Margins are under pressure due to factors such as increasing marketing costs... Margins would go down during the year," Mr Karnik said about the profitability of Indian software vendors.
Nasscom put the data together in association with the Software Technology Parks of India (STPI). Export revenues of 3,900 STPI units, including captive and third party ITES-BPO units, were collated to arrive at the findings.
"The Indian software and services industry is one of the very few sectors worldwide to have witnessed double digit growth and increased its share of the total exports from 4.9 per cent in 1997 to 20.4 per cent in 2002-03," Mr Karnik said.
During the year, offshore projects increased by 67 per cent, but onsite services grew only by 7.8 per centIn fact, as much as 57 per cent of the total exports came from offshore projects.
Captive units run by global corporations increased their contribution to exports to 32 per cent from 26 per cent a year ago. Consequentially, the share of third party vendors came down to 68 per cent, emphasising that Indian software vendors would face tougher competition from captive units in the future.
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