India IT exports seen growing 30 pct in 05/06

BANGALORE (Reuters) - India's software and technology service exports will grow 30 to 32 percent in the year to March 2006, sustaining a boom in a business where jobs have crossed a million, an industry association said on Thursday.
Industry exports grew 34.5 percent, the highest in five years, to $17.2 billion in 2004/05, the National Association of Software Companies (NASSCOM) said.

Exports grew despite a political campaign against outsourcing before the presidential election in the United States, which accounts for 68 percent of Indian exports.

"The year looks very positive. Remember, the base is now hugely increased," said NASSCOM President Kiran Karnik.

Karnik said India's IT industry was no longer based just on low costs, but was looking at a greater share of more profitable high-skill engineering and research and development work.

He said India was concerned about a stronger rupee eroding the profitability of exports and political roadblocks in trade.

"There are concerns about creeping protectionism, sometimes by law," Karnik said.

India's trade minister, Kamal Nath, said on Wednesday New Delhi wanted a new trade agreement that would prevent the United States and other nations from taking steps to ban firms from outsourcing.

India's leadership faces no immediate threat, but there are challenges from wage increases, competition, a strong rupee and protectionism in developed countries.

NASSCOM officials said the global information technology (IT) services market grew 4 percent to $630 billion in 2004, and the small part of it sent offshore was growing every year.


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