Union IT Sectry asks IT industry to scale up value chain

Bangalore, Oct 29 (UNI) Union Information Technology Secretary Jainder Singh today called upon export-focused software industry to cut costs and scale up the value chain to check the effects of rising Rupee against the Dollar.

Delivering the keynote address at the four-day 'Bangalore IT.in 2007,' Asia's biggest ICT event which began at Bangalore International Exhibition Centre here, Mr Singh said the increasing Rupee value against the Dollar, constant wage hikes and spurt in real estate costs had put the IT industry under tremendous pressure.

Scaling up the value chain like adapting Knowledge Process Outsourcing (KPO) industry on a big scale and switching over to tier II and tier III cities, would be the key for industry to maintain the high momentum of growth rate, he added.

Stating that IT and ITeS sectors were the one, which witness the rapid change in technological environment, he said the problems faced by the industry was not easy to solve.

The Rupee, which had appreciated by 12 per cent against the Dollar since January was the biggest concern. ''This has put an enormous pressure on the IT companies and it's time to take some drastic steps,'' he said.

Appreciating the growth made by Karnataka in the IT sector, he said there was a need to set up dedicated IT knowledge cities on the lines of the one that would come up at Bidadi near Bangalore, while smaller cities like Mysore and Mangalore had done extremely well in complimenting Bangalore in IT exports.

With the availability of superior mind power, India should make better use of sectors like KPO that could prove a good alternative to leverage higher profits for the IT sector. The other important thing would be to depend less on the US market, which had led to the fall in profitability.

''We have been over reliant on the US market and this has to change. We need to take up these measures to achieve the target of 60 billion dollars in IT exports by 2010 as targeted by NASSCOM,'' he added.

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