Software Exports-India

Professor in charge Dr Navdeep Kaur

Subject: WSSE

Presented by Kamal Bhalla MBA(IB)-3rd Sem. UBS Chandigarh

SOFTWARE INDUSTRY ACTIVITY BREAK UP

DOMESTIC EXPORT

IT Enabled Services 10%

Products & Packages 41%

IT Enabled Services 10%

Products & Packages 8%

Training 2%

Professional Services 39%

Projects 33%

Support & Maintenance 4%

Professional Services 8%

Training 4%

Projects 37%

Support & Maintenance 4%

Source : Nasscom

DESTINATION OF INDIAN SOFTWARE EXPORTS

USA & Canada Europe S.E Asia Japan W . Asia Australia & NZ Rest Of World

4% 23%

4%

2% 2%

4%

61%

India is exporting software to over 95 countries

Source : Nasscom

INVESTMENT POLICY IN INDIA

Automatic route for foreign equity up to 100 percent in

software and electronics, except aerospace and defence.

100% foreign investment permitted for exports, like:

A number of states have developed their own IT policy to
Electronic Hardware Technology Parks (EHTPs), Software Technology Parks(STPs), Free-Trade Zones/Export Processing Zones (EPZs) and Export Oriented Units (EOUs)

promote the development of software sector. Technology Parks

Tax holiday up to 2010 for IT units to be set up in Software Tax holiday to R&D for up to 10 years. IT venture capital fund set up Simplification and liberalization of Export & Import Policy

Software Technology Park (Scheme)

The concept of the STP Scheme was evolved in 1991, and enunciated the following objectives: To establish and manage infrastructure resources such as data communication facilities, core computer facilities, built-up space and other common amenities To provide 'single window' statutory services such as project approvals, import certification software valuation and certification of exports, for software exporters To promote development and export of software services through technology assessments, market analyses, market segmentation and marketing support

To train professionals, and to encourage design and development in the field of software technology and software engineering

Offshore Product Development

Indian companies can contribute towards
Development of patches and upgrades for core products Support migration to multiple platform versions Legacy product maintenance Localization/ internationalization of core products Development of specific modules and offer testing services

Benefits to Global ISVs

Lower cost resources

Decrease time-to-market through 24x7 development cycles

In-house team can focus on higher value-adding activities Rapidly expand development capacity without fresh recruiting Low-risk opportunity and plug skill gaps due to emergence of new technologies

Leverage the Offshore Model

More than 60% of global majors are conducting product

development from India

Top-tier ISVs adopt a captive model Mid-sized ISVs partner with Indian ITS vendors

Microsoft Intel Hughes Oracle SAP Novell Adobe IBM Veritas Symantac Cadence i2 CA

(ECSE)Electronic & Computer Software Export Promotion Council

Address : PHD House (3rd Floor), Op Asian Games Village, New Delhi - 110 016 Tel: 011-6965103, 6964463 Fax : 011-6853412 E-mail :esc@giasdl01.vsnl.net.in Website: http://www.indiansources.com Contact Person: Mr. R.H. Naqvi, Executive Director Areas of Interest: Electronic goods, Computer Software and related services.

(ECSE)Electronic & Computer Software Export Promotion Council

Indias largest Electronics and IT trade facilitation organization.

Starting in 1989, with an export performance of US$ 200 million, ESC has successfully steered Indias Electronics and Software Exports to US$ 65 billion during 2010-11 with membership of over 2200 exporters today. ESC facilitates global interests of foreign companies interested in establishing business linkages in India. ESCs excellent match making services help interested ICT companies to locate a reliable partner in India for their business requirements.

ESC Functioning

ESC operates through State, Regional, Sectoral and Territorial Committees. The ESC Committees comprise of leading exporters and senior Government officials. ESC represents interests of Indian electronics and IT sector at Joint Trade Committees of Ministry of Commerce, Government of India as well as at Joint Business Councils of various countries.

ESC Membership

ESC has built a strong membership base of over 2300 manufacturers and exporters across the country covering the entire gamut of Electronics and Software Industry in the following areas : Consumer Electronics Electronic Components Instrumentation Telecommunication Computer Hardware and Peripherals Computer Software and IT Enabled Services

ESC Service Portfolio

ESC offers a varied set of services to its members for

accelerating exports. ESC implements foreign assisted development programmes to facilitate : Joint Ventures Technical / Financial Collaborations Strategic Alliances

ESC undertakes Market Research / Studies in major

overseas markets.

Major IT Centers-India

New Delhi,

Gurgaon, NOIDA

Mumbai Pune Hyderabad

Bangalore
Chennai

Why India ?

WHY INDIA ?
High

Hong Kong
UK Ireland

Location Attractiveness
Infrastructure Foreign Direct Investment

India
Philippines Mexico China Lo Lo

Incentives & Country Risk Time zone attractiveness

Workforce Capability

High

Skill Sets, Language Proficiency Quality of work / work ethic Cost Differential

Size of circle corresponds to Number of Qualified Workers

Source: STC, New Delhi

A large pool of engineers come out every year

No. Of Graduates

Source : Department Of Education

Advantage India
Large pool of skilled and university trained technical manpower

matching global standard

Manpower costs in India are a quarter of internationals costs Relatively well developed supporting infrastructure platforms

Usage of latest software tools and a variety of computer hardware Large number of research and development organizations and design /

development centres

India ranks as the most competitive supply of skilled Information

Technology professionals today and is the preferred supplier of software solutions to the developed world, led by the US.

More
205 of the Fortune 1000 companies out sourced software requirements to

India.
Of the 32 companies worldwide having SEI-CMM Level 5 certification the

highest quality standard in software, 16 are Indian companies.

38% of e-commerce startups of 1999 in Silicon Valley by Indians. 50-100 portals being launched in India every month. 170 Indian software companies have already acquired quality certification

: ISO 9000/SEI.
Large pool of software professionals, proficient in English.

Opportunities
Abundant investment opportunities exist in the following thrust areas in India:

Satellite-based Communication Communication Infrastructure Gateways Wireless Software Development IT-enabled Services IT Education IT-enabled education Optical Fiber Cable Data Centers & Server Farms

Software Products Export

Export Highlights 2012

Software product exports to reach USD 1.5 billion, y-o-y

growth of 13 per cent, driven by mobility and cloud applications, SMBs Larger product firms are expanding footprint into emerging verticals like retail and healthcare; also increasing their exposure to SMB market with focused SMB-specific products; SME IT-BPO firms continue to focus on niche areas and customers Domestic software products segment is set to grow to Rs. 180 billion in FY2012, a growth of ~13 per cent over FY2011 driven by the need to replace legacy systems, technology advancements around cloud, mobility, etc.

Indian IT-BPO Industry- FY2012

FY2012 is a landmark year while the Indian IT-BPO industry

weathered uncertainties in the global business environment, this is also the year when the industry is set to reach a significant milestone aggregate revenue for FY2012 is expected to cross USD 100 billion. Aggregate IT software and services revenue (excluding hardware) is estimated at USD 88 billion

Key Highlights 2012

Key Highlights 2012

Milestone year for Indian IT-BPO industry-aggregate revenues cross the USD 100 billion mark, exports at USD 69 billion Within the global sourcing industry, India was able to increase its market share from 51 per cent in 2009, to 58 per cent in 2011, highlighting Indias continued competitiveness and the effectiveness of India-based providers delivering transformational benefits Export revenues (including Hardware) estimated to reach USD 69.1 billion in

FY2012 growing by over 16 per cent; Domestic revenues (including Hardware) at about USD 31.7 billion, growing by over 9 per cent Software and services revenues (excluding Hardware), comprising nearly 87 per cent of the total industry revenues, expected to post USD 87.6 billion in FY2012; estimated growth of about 14.9 per cent over FY2011 Within Software and services exports, IT services accounts for 58 per cent, BPO is nearly 23 per cent and ER&D and Software Products account for 19 per cent

Contd..
The industry continues to be a net employment generator - expected to

add 230,000 jobs in FY2012, thus providing direct employment to about 2.8 million, and indirectly employing 8.9 million people As a proportion of national GDP, the sector revenues have grown from 1.2 per cent in FY1998 to an estimated 7.5 per cent in FY2012 The industrys share of total Indian exports (merchandise plus services) increased from less than 4 per cent in FY1998 to about 25 per cent in FY2012 While the global macroeconomic scenario remained uncertain, the industry exhibited resilience and adaptability in continually reinventing itself to retain its appeal to clients Embracing emerging technologies, increased customer-centricity, deepening focus on new markets, adopting new business models are some successful growth strategies followed by the industry

Economic survey 2011-12

Software: During 2010-11, sales had increased by 17.1 per cent and PAT by 15 per cent. For the year ending March 2012, the industrys sales are expected to grow by 20.5 per cent and further to increase by 18.5 per cent during 2012-13. Growth in sales will be mainly driven by an increase in volumes of IT companies. PAT is expected to grow by 13.1 per cent in 2011-12 and 14.2 per cent in 2012-13. In spite of a healthy growth in sales, the industrys margins are expected to remain under pressure due to higher wage bill and increased tax provisioning.

Overall Growth Performance IT-ITES Sector

Industry Rankings by NASSCOM

Top 20 IT-BPO Export Companies,

Top 15 BPO Export Companies and Top 20 IT-BPO Employers

Survey conducted annuallyNASSCOM members and the participating companies

Top 20 IT Companies- India