INDIA'S SMALL IT FIRMS TO SHIFT FOCUS FROM US TO NEW MARKETS

Dubai
The Economic Times

With the financial crisis hitting the US economy badly, the Middle East is emerging as a key market for the small and medium enterprises (SMEs) of India's IT sector as they seek to reduce their dependence on the US market.

"The US accounts for almost 76 percent of India's total IT exports, but with the slowdown in the US economy, it is very important that we look at alternatives to the US market to diversify the basket," Sunil Vachani, vice-chairman of the Electronics and Computer Software Export Promotion Council (ESC) of India, told the media.

He is here for the ongoing Gitex-2008, the Middle East's largest technology show. Thirty-five Indian companies are participating in the show under the ESC banner. India's Consul General in Dubai Venu Rajamony inaugurated the ESC section of the show here Monday.

Stating that the current global financial crisis is going to hit India's IT exports, Vachani said ESC was trying to reduce dependence on the US market. "The Indian companies have to be proactive and diversify to other countries and reduce their dependence on the US market so that they are not badly affected (by the economic crisis)," he said.

"That is why we are looking at the Middle East as one of the major markets."

Apart from the Middle East, Europe, South America, Japan and southeast Asia are now the focus markets of the ESC, he added. Over 2,300 SMEs in the IT sector are members of the ESC. Of India's total IT exports of $46 billion in 2007-08 - around $43 billion in software and over $3 billion in hardware - the Middle East accounted for $1 billion, an increase of 17 percent from the previous year.