Software exports to grow at 18%

new delhi: software exports are likely to clock around 18 per cent growth for the financial year ended march 31, 2002. this will be lower than the revised target set by nasscom in november last year, according to nasscom officials. in its revised estimates, nasscom had predicted software exports to grow 20-22 per cent in fiscal 2001-02. the software body is expected to announce the annual data next month.it-enabled services will continue to grow at around 70 per cent, offsetting the impact of the decline in core it services. in its revised forecast for 2001-02, nasscom had projected a blended growth rate of 30 per cent in software and services exports at rs 37,000 crore. however, with software exports clocking only 18 per cent growth, the final export figure may be slightly lower than the projected rs 37,000 crore. the forecast for the financial year 2002-03 is also expected to be scaled down compared to the year-ago figures, against the backdrop of the continued slowdown in it spending, particularly in the us. industry bellwether infosys has forecast around 18-22 per cent growth for the current financial year. other top tier companies like tcs, wipro and satyam are expected to grow in the same range. for smaller companies, things may become tougher before it gets better. initially, nasscom had predicted a 40 to 45 per cent growth in software and services exports for 2001-02 but later scaled it down to 30 per cent. earlier, talking about china at a press conference, the nasscom chairman phiroz vandrevala said india’s software industry did not see china as a threat. the dragon country is rather a golden opportunity to take part in its booming $16 billion it market. “china does not pose an immediate business threat to the indian software and service industry as china’s software industry is currently very focused on catering to its domestic it market,� vandrevala said. vandrevala added that the average wage costs in china are comparatively 15-20 per cent higher than in india. nasscom’s comparative analysis of india and china had found that while china scored highly over india regarding government investments in education, r&d, venture capital and infrastructure, india scored over in size, quality and cost of talent pool, project management and domain skills. besides these, china also scored high on vital issues like size of domestic market, cost of telecom equipment and bandwidth. “the possibilities and advantages of cooperation and collaboration with china far outweigh any concerns of competition. engaging rather than ignoring china is a better policy,’’ kiran karnik, president of nasscom said. “a well thought out entry strategy into the chinese market will further boost india’s software exports,� he added. the software body recommended a five-pronged strategy for the indian companies to maintain an edge over the chinese peers. it suggested improvement in productivity through better mix of service lines, standardising processes and development of component libraries; innovation in pricing, delivery and service mix; alliances of both temporary and permanent nature; collaboration with academic institutions and skill upgradation. vandrevala said “most chinese companies lack significant domain expertise or project management skills which offers indian it companies an opportunity to enter into jvs with chinese it companies. this will also provide the opportunity to serve mnc customers of indian companies who are already operating in the chinese it market.� the survey discovered that many hardware companies like chinese pc major legend are foraying into it services.