New Delhi, June 3: The domestic software and services industry is expected to cross the $20-billion mark during the current financial year with exports targeted to grow at 30-32 per cent contributing $16.3 billion to total revenues.

During the financial year 2003-04, the software and services industry grew by 28.2 per cent and earned revenues of $15.9 billion against $12.4 billion in 2002-03. The software and services exports during 2003-04 grew by 30.5 per cent at $12.5 billion against $9.6 billion in the previous year.

The highlight of 2003-04 was the 46 per cent growth in the IT-enabled services (ITeS), including business process outsourcing (BPO), segment that notched up revenues of $3.6 billion. IT services grew by 25 per cent with revenues of $8.9 billion.

“IT (services) is expected to grow at 26-28 per cent generating a revenue of $11.2 billion, while the ITeS-BPO sector is expected to grow by 40 per cent and generate revenues of $5.1 billion,” Nasscom said in its outlook for the IT software and services industry in 2004-05.

Nasscom president Kiran Karnik said, “The Indian IT industry is amongst the top 10 industries in the country. In order to attract more business, the sector will focus on data protection, security and audit compliance. Industry players are also building global delivery capabilities, recruiting in international markets and engaging in merger and acquisition activities.”

He sought government intervention in matters related to broadband and convergence which, the industry feels, will lead to a market growth of $4.2 billion in 2004-05 against last year’s $3.4 billion.

Karnik also said smaller towns like Vizag, Jaipur, Kochi, Pune, Ahmedabad and Chandigarh are emerging as new destinations for BPO services.

Nasscom says pricing trends have become stable and the revenues and margins are unlikely to come under strain. However, external disturbances like the rise in oil prices may have an impact on the rupee, which in turn may cause a minor concern.

With the industry focusing on new services lines like package software implementation, system integration, research and development, engineering and network management, the software and services sector is set for a robust growth.

Nasscom chairman Jerry Rao said, “Despite the challenges, such as slow growth of global IT spending, jobless recovery in major markets, appreciation of the rupee, the Indian software and services industry has been able to maintain its growth momentum and consolidate its partnerships with overseas customers, adding to their competitiveness.”

“An encouraging trend during the year is a healthy growth of the IT services sector, which has gone up from $7.1 billion in 2003 to $8.9 in 2004 registering a 25 per cent growth. The year also witnessed increased maturity of the Indian ITeS-BPO sector, which grew by 46 per cent adding about 70,000 jobs,” he added.