India’s IT industry is believed to have grown tenfold over the past decade as it powers towards an export target of $60 billion (£30.2 billion) by 2010, according to a report published yesterday.

The software and services sector, the most visible in India’s economic success story, is forecast to have sales of about $47.8 billion in the financial year to March, according to Nasscom, the Indian software industry body. This compares with $4.8 billion in 1997-98.

The growth is being driven by exports, which this year are expected to exceed $31 billion, as India continues to be the premier global sourcing destination for IT products and services, despite increasing competition from countries such as Malaysia.

The main sector by revenues is banking, financial services and insurance, followed by technology and telecoms, manufacturing, retail and media. The United States is the biggest market, accounting for 66.5 per cent of revenue, and Britain is the second-largest, at 15.3 per cent.

The figures suggest that India is on track to meet Nasscom’s $60 billion exports target, set two years ago and received sceptically by analysts amid concern that the IT industry was saturated. If met, it would put India close to the US as the world’s largest software exporter.

Pointing to “addressable” offshore IT, engineering and business process outsourcing markets worth at least $330 billion, Nasscom said that India had barely tapped the global potential.

Kiran Karnik, the Nasscom president, said: “We are far from hitting any ceiling. There is scope. If we continue to get our act together in terms of infrastructure and human resources, we have great room for growth. We don’t want to paint a picture as being so bright and rosy, though. There could be roadblocks ahead. We need to achieve 24 per cent a year billion target, but we are comfortable with that.”

Challenges for the industry include data security lapses and a shortage of skilled staff. India produces more than two million engineering graduates a year, but many are unemployable without further training. This demand-supply gap is being tackled with the introduction of finishing schools for graduates, a competence test and a review of the academic curriculum.

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