Share of IT exports touches 10-quarter high despite demand side pressure

MUMBAI: Despite demand-side pressures, the share of software exports in India's total exports reached a 10 quarter high in the September 2012 quarter, shows the latest trade data. Exports clubbed under telecommunications, computer, and information services category contributed 15.8% to total exports during the quarter, the highest since the June 2010 quarter.

During the September 2012 quarter, the country earned $16.6 billion in telecom and software exports, 3% more from the quarter ago and a year-on-year increase of 15%. This also shows that Indian software exporters continued to report a decent growth even though economic scenario in their biggest markets in the US and Europe remained under stress.

The trend is likely to continue since non-IT exports to Europe and the US may continue to face lower demand in the near term given the delayed economic recovery in these regions. IT exports, on the other hand, may sustain their growth rate considering the expectation of a slew of project renewals in the coming quarters.

Exports from services including software, business, finance, insurance, and recreation contributed 32% to total exports from goods and services in the September 2012 quarter. This was three percentage points higher than the year ago.

With 47% contribution, software exports continued to dominate services exports. Travel and transport exports formed the second biggest category with a share of 23% in services exports. Their share in total goods and services exports, remained steady at 3.8% in the September quarter from the year ago.

The category of business services reported the sharpest jump of 120 basis points to 6.8% in 10 quarters to September 2012. Though miniscule at 0.2%, the share of recreation services reported a strong traction over the said period growing from a negligible size.