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IT sector crosses war risk hump, eyes rebound: Mahajan

India's booming software services industry has overcome a temporary hump linked to war tensions with Pakistan this year, and appears set for a rebound, Information Technology Minister Pramod Mahajan said on Tuesday.

The withdrawal of travel advisories issued by the United States and some other nations in June to avoid India in the wake of perceptions that New Delhi and Islamabad could go to war was a signal for business to revive, he told reporters.

"It is unfortunate that the US government could not understand the distance between Kargil and Bangalore," said Mahajan, who was in India's technology capital to address a convention of his Bharatiya Janata Party.

"There is no point in pushing the debate further because they have already withdrawn it (travel advisory)," he added.

Kargil, a Kashmir town near which India fought a near-war with Pakistan in 1999, is more than 2,000 km from Bangalore. The disputed region was at the height of hostilities between the South Asian neighbours again last June.

The advisories spurred by the tensions hit visits by clients of Indian software firms, affecting business trying to claw back from a year of slowdown due to a global technology crunch and the September 11 attacks in the US.

"I am sure that things will pick up now," said Mahajan.

US clients account for more than 60 per cent of India's software exports, which banks on a huge, growing army of low-cost engineers and English-speaking knowledge workers.

India's exports from software and allied services rose 29 per cent to about $7.5 billion in the year to March 2002, and the industry expects 30 per cent growth in the current year.

This is well below the heady rates of more than 50 per cent that India saw in the late 1990s but the nation is banking on future growth, especially in telecoms-driven industries like call centres and back-office accounting, to sustain high growth.

The country aims exports to zoom to $50 billion by 2008.

"There seems to be a U-turn in the world economy," Mahajan said. "I am sure we'll hit the target in 2008."

Mahajan said IT already accounted for two per cent of India's gross domestic product and about 14 per cent of export earnings, and the share was expected to rise in the coming years.

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