Monday, June 06, 2005

India booms on back of offshore outsourcing

India's software and service export industry is booming, according to data released on Thursday by the National Association of Software and Services Companies.
Revenue from the export of software and from services sold to companies from outside India (what's known as offshore outsourcing), reached US$17.2bn during fiscal 2004 to 2005, according to the group, which is also known as Nasscom. The jump represents growth of 34.5 per cent over the previous year's revenue of US$12.8bn.
Of the US$17.2bn, US$5.2bn was revenue from call centres and business process outsourcing services, it said. The remaining US$12bn was generated by software and other services.
The trade organisation attributed the growth to both high-margin segments of the market, as well as traditional service lines in the business process outsourcing sector. It said revenue from product development and R&D services was US$3bn, up from US$2.3bn the previous year.
Indian companies are gaining ground in services such as packaged software implementation, systems integration, network infrastructure management and IT consulting, Nasscom said.
While the UK and the US remain dominant markets, Indian companies are making gains in newer geographies such as Germany, Japan and Singapore, Nasscom said.
Nasscom Chairman, S Ramadorai, said in a statement: "The Indian software and services industry has been able to maintain its growth momentum and consolidate its partnership with overseas customers, adding to their competitiveness. To sustain our competitive advantage, the industry must engage closely with academia to create the right talent pool, collaborate with the hardware industry in microelectronics and embedded software, maximize employment opportunities and elevate service excellence through R&D and quality-benchmarked delivery."
Ramadorai heads Tata Consultancy services, which earned $2bn in software and service exports during the fiscal year that ended 31 March.
Nasscom, which is based in New Delhi, projected growth of more than 30 per cent in exports during fiscal 2005 to 2006.
The organisation also said the number of workers employed in the industry has exceeded one million.
Nasscom has projected a revenue target of US$50bn by 2009.