June 2, 2005 9:21 AM PDT

Indian software, service exports on rise

A correction was made to this story. Read below for details.
India's software and service export industry is booming, according to data released 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, from the U.S. perspective), reached $17.2 billion during fiscal 2004-2005, according to the group, which is also known as Nasscom. The jump represents growth of 34.5 percent over the previous year's revenue of $12.8 billion.

Of the $17.2 billion, $5.2 billion was revenue from call centers and business process outsourcing services, it said. The remaining $12 billion was generated by software and other services.

The trade organization 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 $3 billion, up from $2.3 billion 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 United States and the United Kingdom remain dominant markets, Indian companies are making gains in newer geographies such as Germany, Japan and Singapore, Nasscom said.

"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," Nasscom Chairman S. Ramadorai said in a statement. "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 $2 billion in software and service exports during the fiscal year that ended March 31.

Nasscom, which is based in New Delhi, projected growth of more than 30 percent in exports during fiscal 2005-2006.

The organization also said that the number of workers employed in the industry has exceeded 1 million.

Nasscom has projected a revenue target of $50 billion by 2009.

Correction: This story incorrectly reported financial data for Tata Consultancy services. The company earned $2 billion in software and service exports during the fiscal year that ended March 31.

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Surprised?? Indian software, service exports on rise
The fact that the 'Indian software, service exports on rise' should not really surprise anyone. Why then the headline?

- Mohan B
[Check out my forthcoming book Offshoring IT Services <a class="jive-link-external" href="http://www.offshoringmanagement.com" target="_newWindow">http://www.offshoringmanagement.com</a>
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