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Our Bureau

New Delhi , Sept. 5

THE National Association of Software and Service Companies (Nasscom) on Monday said that the export of IT and IT-enabled services was expected to grow between 30-35 per cent in 2005-06.

The apex body for software and IT services companiesalso said that the Fringe Benefit Tax in the present form would hurt the business.

Last year, IT and ITeS exports grew 34.5 per cent to $17.2 billion. Nasscom had earlier forecast a growth of around 30-32 per cent in 2005-06.

Speaking at the Nasscom-Forrester seminar on `Infrastructure Outsourcing', Mr Kiran Karnik, President, Nasscom, pointed out that a $200-billion global market for infrastructure outsourcing provides a huge opportunity for India.

"The export of infrastructure management services from India has been growing at the rate of more than 100 per cent per annum and this growth is expected to continue as the size of the market is $200 billion and the Indian share is just $450 million," Mr Sudin Apte, Forrester Country Manager (India), said. Forrester has done a study on the infrastructure market.

Mr Apte said Indian vendors would have to carve out a strategy for bagging large IMS deals, which are currently being taken by large multinational companies such as IBM. The most active verticals in outsourcing IT infrastructure are banks and financial services institutions, manufacturing, energy and utilities as most of these have been the early adopters in using the offshore IT services model.

On the impact of FBT, Mr Karnik said, "The way FBT is being implemented in the present form is not good. It would bring a lot of legitimate business expenditure incurred by the companies under the tax net. Companies spent a lot on ensuring long-term benefits of employees, which would now attract tax under FBT. Many of these companies may stop investing in the long-term benefits of the workers."

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