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Indian information technology exports will grow 30 percent annually to 80 billion US DOllar a year by 2011, a federal minister said Wednesday. We are confident that our exports will boom despite the perceived odds against outsourcing and increasing competition, Information Technology and Communications Minister Andimuthu Raja said in New Delhi on Wednesday. From a few million dollars a year in the early 1990s, software service exports have grown to US Dollar 39 billion in the last fiscal year.
Nonetheless, tech stocks have been among the worst performers on Indian equity markets this year because of investor concerns over the appreciation of the rupee against the dollar, which affects earnings from their largest market of North America. The dollar has appreciated about 12 percent this year. For the quarter ending in September, it eased slightly, appreciating only 2 percent.
Undoubtedly, this is a challenge that we have to face in the coming years, Raja said of the appreciation. We have to face the challenge head on by devising newer and innovative strategies.
Indian companies have so far handled the pressures through currency hedging, raising billing rates and winning more outsourcing deals, including in the Asia Pacific region and Europe.
Infosys Technologies and Satyam Computers revised upward full year earnings estimates when they came out with quarterly results this month. Indias largest software company, Tata Consultancy Services and the third largest, Wipro , also saw strong growth.
Tata Consultancy Services said Thursday it had won a 1.2 billion US Dolalr contract from U.S.based Nielsen Co. to handle some of its back office work and information technology related operations worldwide.
Under the 10 year contract, the company will work with Nielsen to integrate and centralize multiple systems, technologies and processes on a global scale, Mumbai based TCS said in a statement.
TCS also will assume responsibility for some back office work relating to finance and human resources, the statement said.
Raja said electronic hardware is going to be an equally significant export driver of the future. The government is looking closely at a strategy to build capacities in the sector, especially by enhancing its research and development arm.
He said his ministry plans to connect the country with a communications network using fiber optic and wireless connections that will have interactive facilities in 22 local languages. The government is helping set up 100,000 broadband enabled Internet service centers to connect people in rural areas.
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