India’s National Association of Software and Service Companies (Nasscom) said software exports from the subcontinent grew 51.4% to $2.65bn in the year ended April 30. India’s software and information technology services industry now accounts for 5% of total Indian exports, and Nasscom predicts that the IT sector will reach $15bn and represent 25% of all exports by 2003. By 2008, Nasscom exports Indian software and IT exports to be $50bn. Last year the US took 61% of India’s IT, Europe accounted for 23%, and Asia and Australia 11.5%.
Contracts related to Y2K preparedness has been an important stimulus for India’s software sector in recent years, and accounted for $560m (21.1%) of exports last year. However, while Nasscom recognizes that Y2K revenues will disappear, new business from electronic commerce projects, euro-conversion, enterprise resource planning and IT-enabled services will continue to drive growth in the Indian software industry.
The Association said the global market for IT-enabled services or remote processing – which covers call centers, medical transcription, data digitalization, legal databases, revenue accounting, data processing, back-office operations, web content development and animation – was expected to grow to $200bn in five-to-seven years from $10bn at present.
Nasscom President Dewang Mehta said India was in a unique position to cash in on this, due to widespread English language skills and a large pool of college graduates. Nasscom said 203 firms in the Fortune 1000, used Indian software and services, while 25 of the top IT firms in India accounted for 63% of all software and services exports.
Mehta said he expected up to 10 Indian firms to list in the US over the next 12-to-18 months, following the listing of Infosys Technologies Ltd earlier this year. There will be more listings and more acquisitions of overseas companies by Indian companies in 1999/2000, he said.
Nasscom said the liberalization of the internet service provider market and the growth of the small office-home office (SOHO) market had propelled India’s domestic software market to increase by 41% to $1.25bn. Nasscom expects domestic software sales to reach $1.7bn in 1999/2000.
