By IANS
Bangalore/New Delhi : India's booming IT industry, which has clocked in a 30 percent growth in revenues in last fiscal, is on track to meet the export target of $60 billion by fiscal 2009-10, a top industry body has said.
"The software services industry continues to exceed forecasts year after year. With this robust growth rate, we are confident the export target of $60 billion will be achieved by FY 2009-10," Kiran Karnik, president of the National Association of Software Services Companies (Nasscom), told reporters in Bangalore after releasing the annual survey of the industry for fiscal 2007.
Riding on outsourcing and offshoring, the software services sector is projected to grow at 24-27 percent in the current fiscal (2007-08) to post topline revenue of $50 billion from exports and domestic market as against $40 billion in the last fiscal (2006-07).
The revenue and export projections for FY 2008 are in line with the Nasscom-McKinsey study of 2005. The lower growth rate from FY 2007 to FY 2008, however, masks the projected incremental revenue of $10 billion, which is higher than ever before.
Of the total revenue projection, software and services exports are estimated to grow by 26-29 percent to $28-29 billion in FY 2008 as against $23 billion in FY 2007. Similarly, exports from ITES-BPO segment will be $11 billion ($8.4 billion) and the domestic market is set to grow by 20-22 percent to contribute $10 billion ($8.2 billion).
Traditional verticals such as transportation, retail and hospitality will supplement the strong demand from banking and financial services, telecom and infrastructure services.
"From a market opportunity perspective, indicators continue to be positive with a potential addressable market of $300 billion, driven by growth of existing business and new servicesline opportunities.
Though India continues to be the most preferred destination for global IT sourcing due to its talent pool, top-quality management and security and quality focus, there are certain short-to-medium term challenges that need to be addressed swiftly," Karnik pointed out.
Among the concerns are rupee appreciation, suitability of available talent, infrastructure development and sustenance of a positive policy/regulatory environment. For instance the rupee appreciation (about nine percent) during the last three months was "too much and too fast" for the software sector.
"With exports generating over 80-90 percent of total revenues, rising rupee is a cause for concern for the industry. Unlike the traditional sectors, which avail import benefits for exports, the IT sector does not import anything. As a result, the impact of rupee appreciation is around 95 percent on the software sector as against 35 percent on the traditional or manufacturing sectors," Karnik noted.
According to the latest survey, the outlook for global IT-BPO demand is positive, as the un-addressed market potential for global sourcing is large. Momentum in new contract signings, renewals, restructuring, merger and acquisitions in key client industries and greater private equity activity are driving the growth and creating new opportunities.
"India continues to maintain its distinctive lead as the destination of choice on parameters such as talent suitability, maturity and business environment. For instance, 28 percent of the suitable talent is available across all offshore locations, which makes India outrank the next destination by a factor of 2.5," Nasscom chairman Lakshmi Narayanan asserted.
"Similarly, broad service portfolio and strong emphasis on security and quality are enabling the industry to leverage the experience curve to derive gains from operational excellence," he said.
The survey ranked TCS as the top exporter in FY 2007, followed by Infosys, Wipro, Satyam, HCL, Tech Mahindra, Patni Computer Systems, I-flex Solutions, L&T InfoTech, Polaris Software Lab among the 20 leading export firms.