IDC revises software export target

NEW DELHI, OCT. 9. Software export target would come under a major review for the third time this year if the U.S.-led air strikes on Afghanistan are to continue.

"Software companies would feel the heat in the third quarter (October-December) due to the impact of the war. There may not be any dramatic change between the possibility of war last month and the actual event of the war, but there is no uncertainty now of the impact," Mr. Ravi Sanghal of IDC, told PTI.

"Even though the attack was factored while assessing the situation when the U.S. was holding out the threat of attack, the fact that the world's largest economy is engaged now in a war is dreadful. And if it goes beyond a quarter, the worst may just become the fact," he said.

Soon after the September 11 terrorist attacks in the U.S., IDC had revised its software exports target to 25-30 per cent for the year 2001-02.

Mr. Sanghal, however, did not give any further revised estimates for the year on account of the air strikes on Afghanistan, now under way. ESC, an autonomous body under the IT ministry, said, the growth could be between 25-30 per cent depending on the longevity of the war.

``By and large, the software exports should not be impacted by the war as most of these contracts are long-term. We maintain our earlier projection of 25-30 per cent growth rate announced in February," Mr. D. K. Sareen, executive director, ESC, said, adding if it goes beyond a quarter, things would be different. The first review had come when due to the ongoing U.S. slowdown, consumer spending had taken a beating while the second revision came in wake of the terrorist attack in the U.S.

Giving a break-up of the sector, Mr. Sareen said, the current misfortune afflicting the airlines industry would affect the travel applications of Indian software companies. ``But at the same time, there could be outsourcing opportunities for these companies in call centres and accounting software space," he said.

He also expressed concern over the delay in reconstruction work of WTC due to the start of the U.S.-led retaliation. ``A lot of Indian companies were hoping to get a big chunk of reconstruction businesses in the U.S. which has been delayed due to the start of the U.S.-led military action," he said.

The Manufacturers Association of Information Technology (MAIT) said the hardware industry, which is already facing a domestic demand crunch, might see the hardest of times due to the attack. ``We are forced to revise the PC volume growth rate to 20 per cent in the current fiscal from 34 per cent last fiscal," Mr. Vinne Mehta, director, MAIT, said. In case the U.S. action continues beyond a quarter, there would be no demand at all, he said.

- PTI

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