India’s software exports face protectionism

India’s software exports face protectionism

Mumbai: India’s flagship software and services exports industry is facing rising protectionist sentiment in key markets, officials of a trade body warned Tuesday.

“The industry is alive and kicking after the global crisis," said Pramod Bhasin, chairman of the the National Association of Software and Services Companies.

“But protectionism, sustained unemployment" in developed nations “will be huge continuing hurdles to deal with," he added.

Nasscom last week forecast India’s software and services exports will post double-digit export revenue growth of 13 to 15% to hit up to $57 billion in the year to March 2011.

The extent of the downturn in the United States -- which is the main market for India’s software giants — is still unclear, Bhasin said at the start of a three-day summit hosted by the outsourcing body in financial capital Mumbai.

But with unemployment in the United States running at just below 10%, there are calls for protectionist action to protect jobs, he added.

India’s outsourcers earn 90% of their revenue from exports — mainly to the United States and Europe.

India’s software exports growth projected for next year is still far below the blistering 28% export revenue rise clocked in the financial year 2006-07.

Indian software companies, whose breakneck growth has been an important driver of the country’s economic modernisation, were hit by the global slump as customers put many projects on hold.

The sector accounts for 25% of India’s overall exports.