Despite political turmoil and poor infrastructure, software and service exports from Karnataka continue to grow and this year will be 44% of the country’s total IT (information technology) and back-office services exports of around $40 billion (Rs1.58 trillion). Software exports from the state, which were growing at a compounded annual growth rate of 38% over the past three years, are expected to grow by 46% in 2007-08.
According to M.N. Vidyashankar, principal secretary to Karnataka government, department of IT, biotechnology, science and technology, the software exports from the state will touch Rs70,000 crore ($17.6 billion) during 2007-08 compared with Rs47,900 crore in 2006-07. Karnataka, which had a gross state domestic product of about Rs1.94 trillion in 2006-2007 dominates software and back-office exports from India. “We could’ve done more than Rs70,000 crore but forthe rupee’s appreciation,” said Vidyashankar.
According to Nasscom, the trade body of the software and services industry in India, the country’s IT exports will grow by 26-29% in 2007-08, with software and services exports of around $28-29 billion, and back-office services exports of $10.5-11 billion.
As of March 2007, there were nearly 2,000 firms operating out of Karnataka. Two of India’s biggest software firms, Infosys Technologies Ltd and Wipro Ltd are also headquartered in the state. Vidyashankar said in the last two months, the state has cleared 82 IT projects worth Rs83,000 crore.
Tier-II or smaller cities such as Mysore, Mangalore, and Hubli have already caught the attention of companies investing in IT. Karnataka is asking IT companies to invest in seven other satellite towns, including Bidadi, Bellary, Belgaum, Kushalnagar, Kolar, Shimoga, and Tumkur.