Export of Software

            India is a major Information Technology software exporter in the world. India is regarded as the premier destination for the global off-shoring market of IT-ITeS, accounting for almost 55% share in 2010.  The amount generated as a result of export during the last three years is as under:

Indian software and Services Exports

   (USD Bn)

Year
FY 2007-08
FY 2008-09
FY 2009-10
FY2010-11(E)
IT-ITES Exports
40.4
47.1
49.7
59.0

 

The export of software in the current financial year i.e., F.Y. 2011-12 is projected at US$ 68-69 billion.  Government extends several incentives for Information Technology Sector in the country under the Software Technology Parks (STP) scheme.

Besides, software is also exempted from basic customs duty.  Furthermore, several items for the IT sector are covered under the ITA Agreement, and hence exempted from customs duty.

Section 10AA of the Income Tax Act provides for a deduction from the total income of hundred percent of profits and gains derived by a unit located in a Special Economic Zone (SEZ) from the export of articles or things or from services for the first 5 consecutive assessment years, of fifty percent for further 5 assessment years and thereafter, of fifty percent of the ploughed back export profit for next 5 years.

This information was given by Shri Sachin Pilot, Minister of State for Communications and Information Technology in written reply to a question in Lok Sabha today.

Growth of Software Industry

         During the FY 2009-10 and 2010-11, the annual growth rate of Information Technology (IT) Software and Service sector has been considerably less than the annual average growth rate of the last five years.  During this period, the annual growth rate is less than the average annual growth rate of the last five years due to global economic slowdown as over 75% of the total software and service revenue of the country is from exports.  The details of annual growth rate of IT Software and Service sector and the average annual growth rate for the last five years is as under:

            (Domestic + Exports) in rupee terms

2005-06

2006-07

2007-08

2008-09

2009-10

Average Annual Growth Rate of last 5 years

(2005-10)

2010-11

(Est.)

Value in ` Crore

133700

1,78,000

2,11,410

2,75,190

3,04,800

24.8%

3,48,330

Annual Growth Rate

31.2 %

33.1 %

18.8 %

30.2 %

10.8 %

14.3%

 

Government extends several incentives for Information Technology Sector in the country under the Software Technology Parks (STP) scheme.

Besides, software is also exempted from basic customs duty.  Furthermore, several items for the IT sector are covered under the ITA Agreement, and hence exempted from customs duty.            Section 10AA of the Income Tax Act provides for a deduction from the total income of hundred percent of profits and gains derived by a unit located in a Special Economic Zone (SEZ) from the export of articles or things or from services for the first 5 consecutive assessment years, of fifty percent for further 5 assessment years and thereafter, of fifty percent of the ploughed back export profit for next 5 years.

This information was given by Shri Sachin Pilot, the Minister of State for Communications and Information Technology in written reply to a question in Lok Sabha today.

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