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Indian Software Industry Registers High Growth


Indian minister for Communications and information technology Dayanidhi Maran, right, and Chief Minister of Jammu Kashmir state Mufti Mohammed Sayeed display mobile phones during the launch of a new 4 million cellular network expansion in Srinagar
India's software industry is growing at a rapid pace as overseas companies continue to move jobs to the country.

India's software and services industry grew by nearly 35 percent in the financial year that ended in March, helping Indian information technology companies earn $22 billion.

The National Association for Software and Services Companies says the industry boomed as international companies continued to move work such as software research, design and development, and customer support to cheaper locations.

India's huge pool of skilled, English-speaking, technology workers has helped it become one of the prime destinations for such work.

The United States and Britain are the dominant market for India's IT industry, but it has begun winning new customers elsewhere, including Japan, Singapore and Germany.

Sojoy Chohan, a consultant at IT research specialists the Gartner Company, says India will remain a global technology hub because few countries in the world can match its huge pool of low-cost, trained engineers.

"Literally there is no competition where IT services are concerned," said Sojoy Chohan. "Indian companies are now becoming very, very large, they are beginning to now compete globally with the large American and multinational players, so that position continues to remain a very dominant one."

But many competitors have emerged in another thriving area - the back-office service outsourcing industry. In recent years tens of thousands of jobs have moved to India as Western firms transferred basic operations such as call centers, data processing and billing to benefit from lower wages.

Mr. Chohan says now other English-speaking countries are beginning to win some of that work because it does not require high technology skills.

"India is beginning to face competition from a whole host of countries, China, which is catching up with its English speaking capabilities, then you have a whole host of English-speaking nations, very small, tiny countries [from] Mauritius to South Africa…. so there is a consolidated challenge," he said.

But for the time being, the future looks good for both software and service exports. The industry is expected to grow by 30 percent this year, helping it reach its target of $50 billion by 2009.

India's IT industry now employs more than one million people in the country, and the boom has raised worries about possible shortages of skilled manpower in the coming years.

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