WHITE PAPER: Offshore Software Development
Aspire Systems, Inc.
www.aspiresys.com Page 15 of 17
Indian Software Industry 1996 -2003
96-97
97-98
98-99
99-00
2000-01
01-02 02-03
Domestic Software Market
670
920
1250
1700
2450
2407
2500
Software Exports
1085
1750
2650
4000
6300
7640
9500
IndianSoftware Industry
1755
2670
3900
5700
8750
10047
12000
(US $ Million)
Source: NASSCOM
The IT industry in India has grown from a meager US $ 1.75 billion in the mid 90's to US $12 billion
in 2002-03. In the midst of a global recession, the Indian IT sector grew over 29 percent in 2001-02
to cross $7.6 billion in terms of export revenues, and achieved a 26 percent growth rate, to cross
$9.5 billion, in 2002-03. The performance of the Indian industry has put to rest any speculation
about the viability and resilience of the industry.
According to Kiran Karnik, Nasscom President, one of the key trends witnessed during the year
2001-2002, was the increase in the offshore delivery model. In fact, in revenue terms it even
overtook onsite revenues for the first time. Offshore revenues accounted for US $ 3767 M during FY
2002 compared to US $ 2292 M in 2000-01. The trend has continued in 2002-2003 with 57% of
total revenues coming from offshore, up from 52% in 2001-02. The offshore delivery model is
projected to become even more popular next year with nearly 62% of revenues coming from it.
Projected Revenues - 2008
India
Based
India
Centric
Sub total
(International)
Domestic
Total
1998
IT Services
23
7*
30
8.5
38.5
2.1
Software
Products
8
2
10
9.5**
19.5
0.6
IT-enabled
Service
15
2
17
2
19
0.4
E-business
4
1
5
5
10
0.2
Total
50
12
62
25
87
3.3
Exports
of
$50
billion
in
2008
($ US billion)
Legacy/client server, ERP and package work and Internet all have different proportions of work outside India where revenues are
not export revenues.
** Resale of imported products included.
Source : NASSCOM McKinsey Report
