Trade & Commerce

Published on Sep 20, 2004 12:25 PM IST

There is a deep convergence of interests between India and the US on countering international terrorism and religious extremism. Overarching these factors is the perception in the US establishment that in the post-Cold War era India, as a stable democracy based on institutional solidity, can be a more reliable partner in America?s policy objectives in the Asian region.

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India’s pursuit of economic reform and liberalisation also evoked a positive response from the US. There is a deep convergence of interests between India and the US on countering international terrorism and religious extremism. Overarching these factors is the perception in the US establishment that in the post-Cold War era India, as a stable democracy based on institutional solidity, can be a more reliable partner in America’s policy objectives in the Asian region. This perception has translated into expanded economic relations as well as greater defence cooperation.

Indian software & services industry has  registered 26 percent growth in 2002. It's share in global exports stands at 1.9 percent at the end of 2002 against 1.5 percent in 2001. The Indian IT and Electronics market in 2002-03 was worth US$ 20.63 billion of which US$ 12.7 bn consisted of software. The software and services exports in 2002-03 stood at Rs. 47,500 crore against Rs 36,500 cr in 2001-02. The IT Enabled services sector registered an impressive 65 percent growth in business at Rs 117 bn in 2002-03 against Rs 71 bn.

ITEs share in total exports was 24 percent against 19 percent in 2001-02 and 14.5 percent in 1999-2000. Of Fortune 500 companies, more than 185 companies outsource their software requirements from India. Identified growing segments include IT enabled services, Web services, and E-commerce Information technology training. It is expected that by 2008 software and services sector would account for 7.7 percent of India's GDP. It is estimated that by 2008, software exports from India would be around US$ 87 billion which would generate a demand for IT hardware to the tune of US$ 50 bn.

North America, the US in particular, is the largest market for Indian software exports The US and Canada's share in the global IT services is growing at the rate of 12-13 percent over the medium term. The US companies generally have a high level of outsourcing, particularly IT services. According to the strategic review (2003) of NASSCOM, the geographical distribution of Indian software exports include software and ITES-BPO; about 80-85 percent of the latter are to the US hence the increase in share of North America in total Indian IT industry exports in 2001-02 and 2002-03.

Indian market for computers and peripherals grew by 30 percent in last four years. According to Ernst & Young, PC sales in India will reach 22 million by 2010. In 2001 computer hardwares and peripherals sales in 2001 stood at US$ 4 bn. Desktop sales in 2000-01 registered 34 percent growth.  Major US companies having presence in Indian market include CISCO, Cognizant Technologies, IBM, Microsoft, Oracle and Texas Instruments.

(Source US Census Bureau)

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