Financial Daily from THE HINDU group of publications
Friday, May 03, 2002
Info-Tech - Software
Industry & Economy - Exports & Imports
`Software, services exports up 29 pc'
NEW DELHI, May 2
INDIA'S software and service exports grew by 29 per cent in 2001-02 to Rs 36,500 crore and are expected to rise by 30 per cent in the current fiscal, National Association of Software and Service Companies (Nasscom) has said.
While the software services sector recorded a growth of 22 per cent to clock revenues of Rs 29,400 crore, the nascent IT-enabled sector surged by 71 per cent to touch Rs 7,100 crore in the year, Nasscom said.
In dollar terms, the growth of the industry was lower at 23 per cent with software exports clocking a growth of only 16 per cent. Nasscom used a conversion ratio of Rs 47.7 to a dollar during the fiscal 2002.
During 2000-01, the industry had grown by 65 per cent to Rs 28,350 crore from Rs 17,150 crore in 1999-2000. The growth of the sector came down in 2000-01 due to the economic slowdown severely affecting the US, India's largest market for software exports.
Nasscom did not provide the geographic break-up for the software exports, saying it will take some more months to compile such data. ``Not only is the Indian software and service industry growing quantitatively but also qualitatively. We are seeing multi-year contracts coming to India which reflect confidence in our abilities,'' said Mr Kiran Karnik, President of Nasscom.
During the year, offshore projects grew nearly 70 per cent while onsite services grew by 10 per cent. The top five companies contributed 55 per cent of the growth of the industry, but the mid-size players took a severe beating with almost stagnant growth. Billing rates were under pressure during the year with average onsite rates falling to $ 55-58 per hour from $ 60-65 per hour. Offshore rates also came down to $ 18-25 per hour from $ 28-35 per hour. The year also witnessed customers going in for consolidation of their vendors and fixed price, multi-year contracts growing.
As for the IT enabled sector (ITES), a number of large companies such as Dell, HP, HSBC and Standard Chartered set up operations in India, creating nearly 35,000 more jobs.
Nasscom said it expects this fiscal to see the start of a `fresh up trend' although the IT spend will lag behind the global economic growth by 2-3 quarters. The association said growth opportunities will emerge in the current fiscal from new geographies such as Germany, France, Japan and Italy and from verticals such as retail, telecom services and utilities.
Billing rates would continue to be under pressure during this year too, Nasscom said.
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