India's software exports to touch $80 bn by 2011

CMN Bureau

NEW DELHI, INDIA: India’s software exports turnover will touch $ 80 billion mark by 2011, Union Minister for IT and Communications, A Raja has said.

Speaking at the All India Awards for Excellence in IT Exports, organised by the Electronics and Computer Software (ESC) Export Promotion Council here today, the minister said the IT exports turnover will touch the $80 billion mark, assuming the exports grow at an average of 30 per cent per annum.

“I wish to put on record that ESC has played an important role in bringing about this transformation. Our IT exports were a few million dollars in the early 1990s and now it is around $37 billion. We are confident that our exports will boom despite the perceived threats against outsourcing and increased competition,” he said.

Raja said that the increase in number of ICT companies from a handful in 1980s to over 4000 now will fuel the growth in IT exports from the country.

“If one looks at the economic history of any developed country, there will be one sector that becomes the driving force behind making that country achieve higher development. It was textiles in the UK, manufacturing and real estate in the US, and technology in Germany. I am proud to recognise that it is the ICT sector that has helped India to emerge as an economic power to reckon with,” the minister said.

Software services to hardware products

Despite software services dominating India’s export market, electronic hardware will be an equally significant export driver in future, Raja said.

“The government is looking very closely at a strategy to build capacities in the hardware sector. I foresee a large number of global corporations relocating their operations to India on account of availability of large number of technical personnel and capability of blending hardware with software,” he said.

To augment the growth of the hardware sector, the minister stressed on increased focus on research and development, as technology changes are faster in the segment.

“R&D offers tremendous challenges and opportunity to the ESC and the IT companies. The government is working closely with the industry for giving a critical put to the industry,” Raja said.

Appreciating rupee, STPI benefits

Referring to the appreciation of the rupee and its impact on the ICT industry, he said, “I am aware of some of the recent difficulties that you are facing on account of the rupee appreciation, which has considerably affected the margins. Undoubtedly, this is a challenge that we have to face in the coming years.”

“In a lighter vein, I feel that such a situation has been created by the booming growth of the IT sector itself – on account of our excellent export performance, which has resulted in accelerated inflow of foreign exchange. We are taking up the issue of continuance of exemptions available under 10A and 10B of the Income Tax Act to IT companies operating under the existing scheme of the software technology parks of India (STPI) at the highest level. We have to face the challenge head on by devising newer and innovative strategies,” the minister said.

Exports expansion

The minister stressed on the need for the industry to focus on alternate markets for exports to reduce the dependence of the US market. “I understand the ESC is focussing on alternate markets like Europe, Japan, China, Singapore, Middle East apart from Latin America, Africa, CIS countries and the ASEAN region to increase India’s exports there.”

Focus on e-governance

The government has plans to connect the nation with a network of communication technologies using optic fibre and wireless connections, and providing a facility to interact in 22 local languages.

“We are in the process of implementation of an ambitious e-governance project right across the country. This will consists of 27 mission mode projects, 100,000 broadband-enabled Internet Common Service Centres (CSCs) are being enabled across the country to connect the citizens of rural areas to the World Wide Web,” Raja said.

“The changes will have a direct bearing on the rural connectivity, governance, PC penetration, employment, quality of education for the underprivileged and those in the small towns and villages, artisans, craftsmen, farmers and more importantly, on IT exports from the country. That’s why I said that India’s economic history is and will be closely associated with our success in the ICT sector,” the minister added.