Kiran Karnik, President, Nasscom — PHOTO: SHANKER CHAKRAVARTY

NEW DELHI: The National Association of Software and Service Companies (Nasscom) has predicted a slight slowdown in exports by the sector during the current fiscal. As against estimates of 33 per cent growth in the previous fiscal, Nasscom forecasts the overall growth rate for software and services exports at 25-28 per cent in 2006-07.

Nasscom President Kiran Karnik pointed out that the projected lower growth rate masked the fact that incremental revenue of $6-8 billions would be higher than ever before. Despite the slight tapering off of the growth rate, the industry was on course to meet the projected target of $60 billion (about Rs. 3 lakh crore) exports by the end of fiscal 2010. Employment trends, both direct and indirect, according to Nasscom estimates, would be 43 lakh.

"With less than 10 per cent of the market currently addressed, a large market opportunity exists for the sector. Factors like evolution of global delivery model, unbundling of large IT outsourcing deals with larger India-based delivery shares and the large contract values due for renewal over the next two years are some of the positive indicators for the sector,''he said in a statement.

However, along with the opportunity, Mr. Karnik drew attention to the challenges including concerns over the quality and skill sets of graduates, infrastructure, maintaining the attractiveness of India for IT investments and steps to boost the domestic market.

In 2005-06, the Indian IT-ITES industry recorded a 33 per cent growth in exports, aggregating revenues of $23.6 billion ($17.7 billion in the previous fiscal). The overall Indian IT-ITES industry (including the domestic market) grew by 31 per cent to $29.6 billion ($22.5 billion). Of the total IT-ITES exports, IT software and services grew by 33 per cent to $13.3 billion, while the ITES-BPO segment clocked revenues of $6.2 billion, recording a growth of 37 per cent. Engineering services and product exports touched $4 billion ($3.14 billion). Revenues from the domestic market stood at $6 billion ($4.8 billion). India was seen to have maintained its distinctive lead over other offshore destinations on parameters like financial structure, business environment and people skills and availability.

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