India's software export growth falls to 4 percent

The Reserve Bank of India states that higher risk aversion by Western outsourcing clients have negatively impacted the country's net software exports performance.

India's software industry is decelerating, as its net software exports expanded by 4 percent--the slowest rate of growth it had posted since the global financial crisis in 2009.

Citing the latest trade data from the Reserve Bank of India, the Economic Times reported Thursday that net software exports, calculated as the difference between software receipts and the payments received, generated US$61.5 billion in the 12 months to June 2012.

This is a slight improvement over the US$58.9 billion in the previous 12-month period, it noted.

However, the rate of growth of 4 percent is one of the country's slowest since 2009, and the RBI attributed this to the higher risk aversion by Western outsourcing clients.

The report noted the last time net exports fell to single digits was in the 12 months leading to June 2009, during the global financial crisis. Net exports rose 6.4 percent then as large financial institutions, which are major consumers of local IT services, were forced to cut back on tech budgets, it added.