IT sector's three-day summit begins today

NASSCOM 2008: INDIA LEADERSHIP FORUM

Against the backdrop of the rupee strengthening against the US dollar and a slowdown in the American economy, the Indian information technology industry is meeting in Mumbai for a three-day summit, hosted by Nasscom, beginning on Wednesday.

The US accounts for more than half of the Indian IT industry's business, and a slowdown could affect Indian companies who are already looking to strengthen business in other markets and back at home.

Many are also keeping their fingers crossed, hoping that the government will extend the Software Technology Parks of India (STPI) scheme beyond 2009.

The IT sector believes it merits a tax holiday. It reasons that there are about 1,500 small and mid-sized IT firms that would bear the brunt if the government did not extend the STPI scheme.

Large companies have the option of moving to Special Economic Zones (SEZ) to avail of tax incentives there, but smaller companies would not find it feasible to relocate their operations to SEZs.

SEZs, often located in and around large cities, pose capacity constraints and high rentals are a cost barrier for small companies.

Notwithstanding these problems, the Indian IT sector's growth has stayed on track. Software and services exports are expected to touch the $40 billion mark in fiscal 2008, or more than 60 per cent of the overall revenue aggregate (including software exports, the domestic and BPO segments), according to the Strategic Review 2008 by Nasscom (National Association of Software and Service Companies).

Nasscom's India Leadership Forum, which will focus on the theme "Shrinking the World, riding the Wave", will discuss the challenges facing the industry as it consolidates on the world stage.

"The IT-BPO industry has the potential to catalyse the economic growth of India and help establish its leadership in the global markets," says Som Mittal, president, Nasscom.

"Its success has not only created opportunities within the sector, but also led to a ripple effect across other industry segments, contributing towards overall development."

A host of global business and technology leaders, analysts, thought gurus, customers and policy makers will take these issues forward at the three-day summit.