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Rising rupee will impact IT growth: Nasscom
May 21, 2003 16:08 IST
The National Association of Software and Service Companies on Wednesday said that the rising value of the rupee against the US dollar will have a marginal impact on growth of Indian IT industry this year.
However, the IT industry body expressed confidence that IT exports will touch the $50 billion mark by 2008 as it had predicted earlier.
"In 2002, the Indian IT industry grew by 28 per cent and this year, due to a rising rupee and other factors, the growth of the industry will be impacted slightly. We will come out with detailed projections for 2003 within the next ten days," Nasscom President Kiran Karnik told newsmen on sidelines of a seminar in New Delhi.
Karnik said India will be able to achieve the IT exports target of $50 billion by 2008, despite the fact that the overall growth of the industry had slipped.
"We had set the target when the dollar was going strong against the rupee. Now with the rupee appreciating, this target may seem a bit high, but a few good years can take us there," he said.
The Nasscom president said that the current business model was good enough to help Indian companies continue on a high growth path.
"Movement from services to products is desirable, but it is a risky and long-drawn process. Some companies are moving towards it but we are doing fine with existing business model," Karnik said.
He said that Indian IT companies need to shed their excessive dependence on the United States and the United Kingdom and crack markets like Japan and Europe to derisk their business.
"These markets are different and if Indian companies want to operate there, they will need to function as global organisations rather than Indian companies. Hiring more locals and buying some smaller companies -- like HCL and NIIT have done -- can make things easier for them," Karnik said.