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ESC reviewing ICT export forecast of USD 155 bn for 2020-21 amid COVID-19 pandemic

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Press Trust of India  |  New Delhi 

The Electronics and Computer Software Export Promotion Council (ESC) has said it is currently reviewing the USD 155 billion target for Indian electronics and software exports from India for 2020-21, amid the COVID-19 pandemic.

ESC, which has been mandated to promote India's exports of electronics, telecom, computer software and IT-enabled services, also expressed optimism of a flat or positive growth, a statement said.

"Keeping in mind the demand and supply disruptions caused by COVID-19 both in India and in the main export markets, uncertainty related to the impact of the virus and how long the virus will be with us, we are carefully looking at the target set to reflect ground-level situation," ESC Chairman Sandeep Narula said.

He added that riding on the back of strength of India and support from the government, "there may not be much downside, rather could see flat or a positive growth".

Although the pandemic will have an adverse impact on India's ICT exports in the short run, the sector is expected not only to make up for the losses but also grow in the long run due to the possible uptrend in investment by those global companies considering moving out of China, Narula said.

Narula, who has recently taken over as chairman of the 33-year old organisation, welcomed the government's Rs 20-lakh crore financial package, as well as the focus on the MSME sector.

He said the small and mid-sized companies in the ICT sector would benefit from the booster package.

Narula noted that India's export of software may be under strain in the short run, particularly affecting small and medium enterprises mainly due to disruptions in airline, hospitality, banking and other related sectors in the US and Europe.

He said these are traditionally strong software markets for Indian companies and many Indian companies have ongoing contracts with the overseas companies belonging to this sector.

While ICT companies have been able to function by asking the employees to work from home that has helped meet some of the obligations, the demand may drop going ahead, resulting in short-term losses, he said.

Once these segments are back on track, the Indian software sector will be in a position to cater to their business needs, he added.

Narula said the decision of some of the state governments to proactively reform labour laws for new units to be set up has the potential to attract a large number of multinational corporations looking for relocation from China.

"Our knowledge is that many technology and electronics majors are seriously considering shifting to India driven by commitment of the union government to make India an attractive investment destination," he added.

He further said the policy framework has to be fine tuned to promote backward integration as currently, companies are migrating from CKDs (completely knocked down) to SKDs (semi-knocked down) assemblers.

"Promoting backward integration will help us to move in the value chain and in creating a large number of employment, besides accelerating exports," he added.

Narula said India can emerge as an important centre for IoT (internet of things) development hub by taking advantage of its inherent strengths in the software sector.

With the IoT global market estimated to grow to about USD 800 billion by 2025, India is poised to rapidly grow its export. ESC has already commissioned a study to assess the potential of IoT solutions in export markets.

"ESC will be playing a very active role by providing various online and offline platforms like IoT show to make India a top player in the segment, like it has played in the software sector," he added.

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Sun, May 17 2020. 19:58 IST
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