IT exports from Hyderabad grow 26% in 2002-03

IT exports from Hyderabad rose by 26 per cent to Rs 3,668 crore (Rs 36.68 billion) during the financial year 2002-03 even as this city -- known as Cyberabad -- ranked fourth in the country, after Bangalore, Noida and Chennai.

Addressing a media conference in Hyderabad on Monday evening, M Vijay Kumar, director of STPI (software technology park of India) Hyderabad said the ITES (information technology enables services) segment had grown by a hefty 104 per cent to Rs 1,411 crore (Rs 14.11 billion), contributing 39.16 per cent of the IT exports.

While Bangalore remained on top in IT exports with Rs 12,350 crore (Rs 123.50 billion, a growth of 25 per cent over previous year), Noida came second with Rs 7,450 crore (Rs 74.50 billion, 32 per cent increase) and Chennai ranked third with Rs 6,315 crore (Rs 63.15 billion, 21 per cent growth).

Vijay Kumar said IT exports from Hyderabad grew by 42 per cent during 2001-02 to Rs 2,907 crore (Rs 29.07 billion) but the growth had come down in 2002-03 in view of the depressed market conditions. As against a target of Rs 4,000 crore (Rs 40 billion), the actual exports were less by Rs 332 crore (Rs 3.32 billion) in 2002-03.

The STPI Hyderabad director admitted that almost all the growth in IT exports during the year 2002-03 has come from the ITES segment. The software exports, on the other hand, have grown marginally from Rs 2,217 crore (Rs 22.17 billion) in 2001-02 to Rs 2,257 crore (Rs 22.57 billion) in 2002-03.

He said that there was remarkable growth in the ITES segment with exports almost doubling from Rs 690 crore (Rs 6.90 billion) in 2001-02 to Rs 1,411 crore (Rs 14.11 billion) in 2002-03.

"With the consistent efforts of the STPI and the Andhra Pradesh government to give a boost to ITES and BPO (business process outsourcing) segments with special initiatives and approaches, the share of ITES exports to total IT exports increased to 39.16 per cent during 2002-03 from 24.11 per cent in 2001-02," he explained.

With several innovative measures, the ITES sector is poised to grow much higher in the coming years.  The STPI, Hyderabad, has set an overall IT export target of Rs 4,700 crore (Rs 47 billion) to Rs 5,000 crore (Rs 50 billion) for the financial year 2003-04, indicating a growth of 40 to 45 per cent.

The target for the ITES segment alone has been fixed at Rs 2,500 crore (Rs 25 billion). "We are confident of crossing the $ one billion mark this year (2002-04), the STPI Hyderabad director said.

"Hyderabad is emerging as one of the fastest growing ITE centres in the country as a hub for outsourcing activity. Besides the existing MNCs, many renowned companies --Nipuna, Dell Computers, 24/7, Cognizant, Capmark Overseas, Activecard, Click2learn, Swift Response, Redpine Signals Inc -- established their units in Hyderabad during 2002-03 and strengthened the Hyderabad IT and ITES industry," Vijay Kumar pointed out.

In all, STPI Hyderabad added 81 new units, taking the number of registered units to 1,401. There were 820 operating units and 352 units under gestation at the end of March 2003.

The remaining 229 units were non-operating units, which were de-registered. Many new entrants such as Navionics, Fusion, Global Customer Value Management LLC, IVY Comptech, Versata, GE Power Controls, GE Power Services, Knoah, Wipro Health Care commenced their operations.

Companies such as Nipuna, TCS, Kernex and Vanenburg (Phase II) completed construction of their campuses in and around Hyderabad.

The STPI Hyderabad director explained that though most of the exports were made to the United States and Canada (59 per cent), exports to other regions such as the UK, the Netherlands, Europe, Japan, Australia, Asia and Middle East have shown an upward trend during 2002-03. Europe (excluding the UK and Netherlands) accounted for 18.72 per cent of the total IT exports from Hyderabad.

With the significant increase in the ITES segment, exports through datacom facilities increased to 79.26 per cent of the total IT exports. Exports through physical media accounted for a mere 0.22 per cent and the onsite consultancy projects accounted for 20.52 per cent of the total IT exports during 2002-03.

"The value of software exports through datacom facility is likely to grow with increased bandwidth, wide global reach, access to new markets and new geographies and increased outsourcing activity to India, particularly in the Call Centre, BPO and other ITES segments," Vijay Kumar observed.

The number of persons engaged in various software export houses has grown to 71,445, including 64,295 software professionals and 7,150 support staff at the end of 2002-03. The workforce in the ITES segment has increased to 25,000 now.

The capital investment in new software export houses rose by Rs 512 crore (Rs 5.12 billion) during 2002-03, including Rs 163 crore (Rs 1.63 billion) in 26 foreign companies and Rs 349 crore (Rs 3.49 billion) in 55 Indian companies.

The IT companies in Hyderabad cover a wide range of areas such as ERP, system software, application software, web applications, Internet applications, communication software, consultancy services, software technical services, CRM, CAD/CAM/GIS, remote data entry, data warehousing, expert systems, embedded software, electronic design automation, chip designing (VLSI), multi-media, animation, medical applications and medical transcription, research and development and offshore and onsite maintenance.

Unlike the previous years, the last financial year has seen the establishment and growth of a large number of companies engaged in embedded systems and VLSI design, thus facilitating the Hyderabad IT industry to move up the value chain.

With several renowned multinational companies as well as Indian companies joining the STP scheme and many more overseas corporate bodies and NRIs evincing interest to establish software export houses in Hyderabad, the investments and exports are expected to grow at a steady pace, Vijay Kumar added.