IT exports grow 31% in 2003-04

Software and services revenue may touch $20 bn in 2004-05

The Indian software and services industry is expected to cross the $20 billion mark in the current financial year, with exports likely to maintain the current growth momentum of 30-32 per cent at over $16.3 billion, according to a National Association of Software and Services Companies (Nasscom) survey.

The total revenues the software and services sector, including that of the domestic market, rose 28.2 per cent to $15.9 billion in 2003-04, compared with $12.4 billion in the previous fiscal.

Exports had registered a 30.5 per cent growth in 2003-04 at $12.5 billion, compared with $9.6 billion in the previous fiscal.

Addressing a press conference today, Jerry Rao, Chairman, Nasscom said, "Despite challenges such as slow growth of IT spending globally, jobless recovery in major markets and the appreciation of the rupee, the Indian software and services industry has been able to maintain its growth momentum."

The IT services sector recorded a healthy growth of 25 per cent to $8.9 billion in 2003-04, against $7.1 billion in 2002-03.

The ITES-BPO sector saw a growth of 46 per cent adding approximately 70,000 jobs, Rao said.

"This was a year of remarkable achievement with two IT majors -- Infosys and Wipro -- entering the billion dollar club taking the figure to three with TCS," he pointed out.

In 2003-04, the ITES-BPO industry added 65,000 jobs, while in software and services sector 40,000 jobs were created totalling more than a lakh jobs.

This raised the total number of employees in the sector to 8.1 lakh.

The US continued to be the primary market for India accounting for 70 per cent of the total software exports, followed by the UK with a 15 per cent share, the Nasscom survey said.

Small and medium enterprises recorded a 20 per cent growth in revenue during the year.

Software and services companies started looking beyond metros in 2003-04 to expand operations to cities like Vizag, Jaipur, Kochi, Pune, Ahmedabad and Chandigarh.

On the backlash in the US against outsourcing, Nasscom said the issue had been blown out of proportion.

"The issue of outsourcing, which dominated the headlines and debates for the whole of 2003, has taken a backseat and the rhetoric level on this would come down," Nasscom President Kiran Karnik said. The backlash had no impact on the business of IT companies in India and with increased IT spending in the US, the resistance against outsourcing would further reduce, Jerry Rao added.

He pointed out that the entire BPO-ITES industry created 65,000 jobs in India, while the US economy added 300,000 jobs per month so the statistics indicated that offshoring has had no impact on the US employment scene.