Doubts Over Nasscoms $50 B Export Target

New Delhi: | Updated: May 22 2003, 05:30am hrs
The Confederation of Indian Industry (CII) chief economist Omkar Goswami has raised doubts over the $50 billion export target set by National Association of Software and Service Companies (Nasscom) to be achieved by 2008.

A 33 per cent year-on-year growth over the next six years required to achieve $50 billion is an over-stretched estimate by Nasscom. However, $50 billion as an overall industry (revenue) target (including exports) is still achievable with 22 per cent year-on-year growth, Mr Goswami said. Mr Goswami was speaking at the economists panel discussion on IT-Impact on economic growth and future prospects.

The other panelists present at the discussion included economists Jairam Ramesh, Dr Ashok V Desai and Professor PB Nayak.

Mr Ramesh pointed out that geo-political conditions in India (especially Indo-Pak relations) have resulted in a few missed opportunities for the Indian IT industry.

India is no longer considered a risk free country as it was few years ago. Also companies do not want to put all their eggs in Indias basket and are looking at other Asian countries. We have lost quite a few opportunities to Ireland in the recent past, Mr Ramesh said. He also touched upon other issues like low IT adoption in the domestic market.

By 2003, Mr Goswami indicated that the IT industry will attain $16.5 billion in terms of revenues, of which exports will account for $9.75 billion.

The panelists agreed that the Indian IT software and services industry should think beyond software and IT-enabled services and focus on areas like chip designing. By and large, the Indian IT industry has been achieving margins of 20-25 per cent. These margins cannot last for long and profit margins can even fall to 5 per cent, Mr Desai said. The slowdown has been greater in the domestic market. Domestic market is a bother and deserves not to be served when IT firms can earn better margins by exporting.