Software exports target a mirage, says STPI chief

R Ravichandran

Hyderabad, July 15: There is no sign of a revival on the software exports front. The Indian software exports do not seem likely to achieve the 40 per cent growth projected by Nasscom for the current fiscal.

“If one takes into consideration recent happenings, even the cut-down projection of 40 per cent growth in software exports by
Nasscom is unlikely to be met,” Col Vijay Kumar, director,
Software Technology Parks of India (STPI), told The Financial Express.

“Upto June it was alarming. There is no sign of a revival. The end of the year is the optimistic period for the markets to revive. But it may extend to the first quarter of 2002 also,” Col Kumar said. “In absolute terms the total growth could be in the range of 30 per cent or below that,” he admitted.

Lack of new application development, non-availability of funds, venture capitalists’ (VCs’) differed decisions on investments, US corporates wait-and-watch attitude towards their expansion plans or getting into new business, decrease in demand for technology in networking and communications, were some of the main reasons for poor exports, Col Kumar said. The most important factor was aggressive pricing. Even the big companies have been forced to bargain for pricing.

“The big companies can withstand the pricing factor, however, the small and medium companies, which accounts for more than 80 per cent of the total in India, may have to shut shop or be forced to change their business model,” Col Kumar claimed.

After the dotcom bubble burst followed by the US economic slowdown crisis, the return on investment (RoI) has become a major factor for the companies to take any further decision on investment. “Most of the companies have become choosy about investment and very cautious about their RoI,” he said.

On the European and Japanese markets, Col Kumar said these markets had not yet developed fully. Together, the two markets account for 15 to 20 per cent of our total exports.