Indian IT firms should diversify export markets: U.N.
NEW DELHI: "The performance of the Indian IT industry depends largely on global economic conditions, particularly the U.S. market," said the report by the Economic and Social Survey of Asia and the Pacific (ESCAP).
"This became evident in 2001 when a slowdown in the American economy had an adverse impact on the Indian IT industry. Diversification of the market for Indian IT exports could reduce the industry's external vulnerabilities," it said.
The survey noted some moves have already been made to increase exports to Germany, France and Italy in Europe, Singapore, South Korea and Malaysia in Asia, and Chile, Mexico, Uruguay and Brazil in South America.
"The variety of IT services would also be expanded," it said, adding increased attention is being given to business process outsourcing sector with overseas clients engaging Indian firms to manage their critical operations and accounts.
According to the survey, IT is of increasing importance to the Indian economy, in terms of both export revenue and employment generation.
"The highly dynamic IT industry grew at an average annual rate exceeding 50 percent from 1991 until 2001," it said, adding the industry created 92,000 new jobs and provided 250,000 people with indirect employment during the period.
"Overall, IT exports accounted for over 16 percent of India's total exports in 2001. It is expected that by 2008 the industry will account for 7.7 percent of India's GDP and 35 percent of its total exports."
The Indian software industry has set an ambitious goal of earning $50 billion in exports revenue by 2008.
The survey said the Indian government had played an important role in providing "critical inputs and removing major bottlenecks" from the path of software industry to help it achieve the export target of $50 billion.
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