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Friday, 17 August, 2001, 12:12 GMT 13:12 UK
India software industry fears rivals
IT workers in India
India's IT industry continues to show strong growth
The growth of India's software exports has fallen sharply, and the country's programmers are increasingly worried by emerging competition from China.

Year-on-year exports are still growing by 52% to 86bn rupees ($1.8bn) according to the National Association of Software and Service Companies (Nasscom).

But this growth rate is well below the 65% increase recorded in the first three months of the year.

"Irrespective of the slowdown, leading (top 20) Indian software and service companies have continued to grow at over 50%, which is very positive by any industry's standard," the association said in a statement.

When asked about increasing competition for Indian software companies from other countries in Asia, Nasscom chairman Phiroz Vandrevala identified China as the main contender.

Good outlook

"Although the growth in percentage has dipped a bit, the industry continues to grow at a steady pace," Mr Vandrevala said, adding that the results were good given the worldwide software slump.

But he warned that Indian software companies would have to speed up product delivery to improve their competitiveness in the global market.

"The threat from China comes from the size of its domestic market, which is huge," he said.

Nasscom has begun collecting data on the Chinese IT industry and would continue to build and protect Indian brand awareness through an aggressive marketing campaign in Britain and the US.

Forecasting a revival in the global market by the fourth quarter, Mr Vandrevala said the industry was "well on target" to export 400bn rupees of software in the current fiscal year.

US fears

Companies like Infosys Technologies, Satyam Computer Services, Wipro and Tata Consultancy Services of the Tata Group, which account for more than 80% of the sector's export revenues, were identified as the driving forces behind the industry.

But the economic slowdown in the US has dented the outlook for India's software companies over fears that their clients would cut technology spending.

About 62% of Indian software exports go to the US, which accounts for 14% of India's total exports and represent two percent of its GDP.

Nasscom expects smaller companies to be amongst the casualties of the slowdown.

See also:

20 Jul 01 | Business
Indian firms defy tech slowdown
10 Jul 01 | Business
Infosys profits jump
05 Jun 01 | Business
Software firm 'made false claims'
17 Apr 01 | Business
Asian exodus from Silicon Valley?
30 Mar 01 | Business
Wipro shares dive
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