World Bank Warns India of Slowdown, Nasscom Rubbishes the Alarm
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NEW DEHLI --The World Bank has forecast a slowdown in India's software exports due to the global downswing in the information technology (IT) sector.
The Bank's annual global development finance report released on Tuesday states: "a slowdown in India's high-technology service exports appears imminent due to the global downturn in information technology."
The bank's lead economist on development prospects, William Shaw, added the downturn in the US economy could hit Indian software companies. India was proposed to take $4 billion annual software exports to $50 billion by 2008.
However, Nasscom (www.nasscom.org), the chamber representing software companies, boldly countered this by claiming India expects its annual software exports to go up from a current $ 4 billion to $ 50 billion by 2008.
Nasscom feels by expanding into new markets like Australia, India can continue to experience a high software export growth.
The bourses across the country seemed to reflect the Banks belief as IT stocks continued to fall. But the World Bank also feels India need not be unduly worried about its tech stock future, but for different reasons.
Shaw, who presented the report here today, said "With modern IT tools helping corporates read the future better, the time between business downswings and upswings has shortened considerably and one can expect better days for the world economy soon."
Indian IT czar, Azim Premji, Chairman of Wipro Corporation has also said that the downturn in the US telecom and IT sectors would augur well for Indian software companies in the months ahead
Premji said that the slowdown in the US economy would force companies there to reduce costs and reassess their priorities. Since outsourcing software from India was cheaper by more than 40 percent compared with the US, Indian software and software services outfits could expect a significant rise in business from the US companies.
Already, around 20 percent of the top 1,000 US companies outsourced their software requirements from Indian firms.