However, what is disturbing is that the share of software product and packages in total software exports has been declining. This appears to indicate that most of the growth in software exports continues to come from relatively low value-added activities like solutions for the Y2K problem. The need for software projects arising out of the launch of the euro is being seen as a major opportunity by most domestic software companies.

While there is no doubt that even such low value-addedactivities generate substantial revenues and employment opportunities, it is also a fact that these are merely temporary assignments. The question that arises here is: will the growth in software exports be sustainable in the long run?

Not if the composition of the exports remains skewed in favour of low-value activities, for it will be fairly easy for the likes of Bangladesh, Pakistan and the south-east Asian nations to wean away business in the future. For a sustainable growth, Indian software companies must adopt a product-centric approach. This will require not only successfully launching a product but constant improvements in it to prevent its obsolescence. Only if that happens will India become a truly formidable software-developing nation.