India's outsourcing industry expects to grow by 33%

Benefiting from a boom in offshore outsourcing, India's software and services exports are expected to grow by 33% to more than $31 billion in the Indian fiscal year, which ends on March 31, according to data released Tuesday by the National Association of Software and Service Companies (Nasscom).

India’s top outsourcing companies -- Tata Consultancy Services Ltd., Infosys Technologies Ltd. and Wipro Ltd. -- have all reported strong revenue and profit growth for the quarter ended Dec. 31, mainly on increased volumes of business.

The country is on course to achieve $60 billion in exports by 2010, Nasscom said.

IT services, including software development, are expected to contribute $18 billion to exports in the year to March 31, while business process outsourcing and call centers are likely to contribute a further $8.3 billion in Delhi, according to Nasscom. Engineering services, research and development services, and product development work are expected to contribute $5 billion.

The data includes exports by both Indian outsourcing companies, and Indian operations of multinational services and technology companies like IBM, Dell Inc., Oracle Corp. and Accenture Ltd.

The total Indian software and services industry, including sales to the domestic market, is expected to grow during the fiscal year by about 31% -- to $39.7 billion -- Nasscom said.

Employment in the country's software and services sector is likely to reach 1.6 million by March 31, up from 1.28 million in the previous year, according to Nasscom.

India is riding a boom in outsourcing. A report released by McKinsey & Co. and Nasscom has forecast that the country's outsourcing industry can grow at an annual rate of over 25% to generate export revenue of about $60 billion by 2010.

To achieve this, however, India will have to improve the quality of education and train more staff to counter an expected shortage of 500,000 staff by 2010, according to Nasscom.

The association has proposed setting up a chain of finishing schools for IT professionals to make them more employable. A three-to-four-month honing of technical skills and training on "soft skills" like better communications will help bridge the gap between staff supply and demand by at least 30% to 40%, Nasscom said.

Copyright © 2007 IDG Communications, Inc.

It’s time to break the ChatGPT habit
Shop Tech Products at Amazon