The National Association of Software and Service Companies on Monday said the Indian software and services sector will post a 28 per cent growth in 2003-04 at $12 billion in revenues, compared to $9.5 billion in 2002-03.

"The Indian industry has sustained its growth trend and continues to post a strong double digit growth, despite a slow economic growth in key markets and emerging concerns against business process outsourcing from India," Nasscom president Kiran Karnik told reporters in Mumbai.
 
Besides cost advantages, factors such as quality, productivity, total cost of innovation and customisation helped the country maintain its lead in the global IT industry, he said, quoting a recent Nasscom study.

The domestic IT market is estimated to grow by over 11 per cent in 2003-04 to touch $7.4 billion [Rs 15,350 crore (Rs 153.50 billion)], buoyant on conducive government policies and the recent reduction in customs and excise duties on personal computers, he said.

The domestic IT market would post a 15 per cent growth and is expected to maintain the momentum for the next three to five years, he added.

Nasscom estimates that the total software and service exports, and ITeS-BPO space is likely to post a 54 per cent growth to $3.6 billion in 2003-04 from $2.3 billion in 2002-03.

The share of European and Asia-Pacific markets to total Indian exports continues to post growth, with North America remaining a primary market, contributing 69 per cent of the Indian software and service exports, Karnik said.
 
Banking, financial services and insurance continues to be the largest vertical garnering 39 per cent of software and service exports, he said, adding retail, manufacturing, healthcare and telecom services would emerge as "sunrise verticals."
 
A significant potential exists in service lines like application outsourcing, custom application development, embedded software, offshore product development, and research and development, he said.

India's offshore services, which contributed $5.4 billion to the country's export revenues, is expected to reach $7.2 billion in 2003-04, he added.

The country's e-governance policies, with a proposed outlay of $560 million, would also result in a growth in such projects in India, he said.