Software exports: IDC revises growth rate

NEW DELHI, MAY 25. Hit by the slowdown in the U.S. economy, the Indian software exports growth rate is expected to slip to 20-25 per cent for the current calendar year in dollar terms from the earlier projection of 50 per cent, a latest report has said.

According to estimates by International Data Corporation (IDC), the overall exports (combining all sectors) growth rate may also come down to 12-13 per cent in 2001-02 compared to 17 per cent in the previous year.

The report `U.S. slowdown and its impact on Indian economy' said the growth rate of exports in dollar terms would come down to 20- 25 per cent and in rupee terms it is projected at 25-30 per cent although the situation was expected to improve from 2002 onwards.

"The drop is not as dramatic as it appears primarily because of change of the business model. A lot of work is shifting from onsite to offshore.

This results in lower topline growth even though profitability is much higher in offshore contracts," it said adding that the bottomline growth would be firm.

It said the implications of the U.S. slowdown on India would be twin, that of decline in exports from India and a fall in U.S. investments in India.

Pointing out that India's export as a percentage of GDP is less than 10 per cent, it said that only about one-fourth of India's exports were targeted towards the U.S. and thus the slowdown would not affect the total exports significantly.

- PTI

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Section  : Business
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