Software exports cross Rs 3,500 crore in Q1

NEW DELHI, August 20: Software exports generated a total revenue of Rs 3,520 crore

during the period April-June 1999 as against Rs 2,270 crore during the corresponding

period in 1998. This was revealed in a survey conducted by National Association of

Software and Service Companies (NASSCOM).

According to Nasscom president Dewang Mehta, as on August 18, the aggregate market

capital of the IT sector was estimated at Rs 79,070 crore, thus out-placing personal care

and refinery segment from the top slots. Mr Mehta further said,"Thus, the market

capitalization of the software driven IT industry has crossed 15 per cent of total market

cap at Indian stock exchanges". He attributed this growing confidence of investors to

the handsome performance of Indian software industry.

Mr Mehta attributed this continued growth in software exports "to the growing

respect of Indian software expertise, further creation of Brand Equity of Indian software

industry and further strides may by Indian

software industry into E-commerce and IT Enabled Services". Mr Dewang Mehta

pointed out that "the contribution of Y2K solution projects in software exports is

almost 20 per cent of total software exports in Q1". According to Nasscom Survey,

since 1996, Indian software export industry has executed more than US$ 2 billion of Y2K

software solutions for the overseas market.

According to Mr Mehta, "the Indian software industry is now focussing on greater

opportunities beyond Y2K. This includes upcoming segments of E-commerce, Euro and the wide

ranging gamut of IT Enabled Services". Nasscom survey indicates the global slowdown

in spending for Y2K software solutions in latter part of 1999-2000, is not expected to

adversely affect the Indian industry’s export as many companies have started

retraining their employees and are focusing on emerging areas of E-Commerce, Euro,

ERP,

Systems-on-chip and IT Enabled Services. He also added that , "the industry has

evolved from staffing to software development to integration and IT business

consulting".

Nasscom survey indicates that the total software exports in 1999-2000 may even touch Rs

16,700 crore (US $ 3.9 billion). Mr Mehta said, "One of the main strategy for

software industry in 1999-2000 would be to move up the value chain and sow seeds of

E-commerce, web based technologies and Interactive integration". Mr Mehta added that,

"the strategy would involve more acquisitions of overseas companies by Indian

companies". The Nasscom survey stated that Government of India should make overseas

acquisitions by Indian companies easier.

The Nasscom survey revealed that major factors which continue to hinder growth of the

Indian software industry are: continuance of physical bonding at STP, EOU and EPZ units,

lack of global parity in telecom tariff and inadequate telecom infrastructure". Mr.

Dewang Mehta demanded immediate implementation of the Task Force recommendations to solve

these issues.

According to NASSCOM’s study released earlier, the total revenues of the Indian

software industry for the year ending March 31, 1999 (1998-99) was estimated at Rs 15,890

crore (US$3.9 billion). Out of this, during 1998-99, software exports grossed revenue of

Rs 10,940 crore (up from Rs 6530 crore in 1997-98), while the domestic software market

grossed revenue of Rs 4,950 crore (up from Rs 3510 crore in 1997-98). The Nasscom survey

also indicated that total annual software exports could be to the tune of US$10 billion by

the end of the Ninth Five Year Plan, i.e. in year 2002.