Middle East is the new market for India's small IT firms

Dubai: 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, said.

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.

"Of this $1 billion, software exports accounted for $600 million while electronic hardware's share was about $400 million," the ESC vice-chairman said.

Electronic hardware comprises IT hardware, consumer electronics and electronic components.

"In the Middle East, we are now looking at a growth of 25 percent," he said, adding: "At Gitex, we want to showcase that there is a huge strength in India's small and medium IT companies also."

Compared to the share of IT biggies in India like Infosys, Wipro, Satyam and Tata Consultancy Services, SMEs have also emerged as significant players when it came to exports.

"Of India's total IT exports (in 2007-08), SMEs accounted for 40 percent of the total electronic hardware exports and for software, the figure is 30 percent," Vachani said.

Source: IANS

Yahoo to announce more job cuts next week

Los Angeles: Yahoo is expected to announce more job cuts when it would present its third-quarter earnings next week, officials said.

The Internet portal giant is likely to lay off at least as many employees as it did in January, when it sacked 1,000 workers, people familiar with the industry said on Saturday. Yahoo currently has around 14,300 employees.

Leading online auction and shopping website eBay announced earlier this month to lay off 10 percent of its 16,000 workers, while search engine giant Google reportedly has been quietly trimming its contractor workforce.

Google has a total workforce of around 30,000 people, including around 10,000 contractors. However the company declined to disclose how many contractors it has let go.

Industry analysts said that the Internet companies, which typically have large overhead and staff numbers, are bracing themselves for a tough economic situation in fears of a global recession.

Source: Xinhua Internet Site