Indian software industry has increased its market share in global information technology spending by 2.8 per cent in 2002-03 as against 1.5 per cent in 2000-01 despite a slowdown in global IT spending.

The US alone accounts for around 67 per cent of India's total software exports during 2002-03, says a report on currency and finance released by the Reserve Bank of India.

This estimate comes at a time when the US has sanctioned outsourcing by US companies for government related businesses.

The RBI, in anticipation of uncertainties, has suggested in its report that in order to preserve its lead in IT services and BPO, it is essential for India to expand the domestic market by expediting deregulation and privatisation in key sectors like telecom, financial services and retail.

In addition to this, India could also tap, the report said, emerging growth areas as product data management, content management, business intelligence, wireless applications and verticals like utilities, retail and healthcare.

Above all, the report has advised Indian companies to diversify into exports of computer hardware and achieve vertical integration to counter slowdown of vibrant economies like the US and reduction of IT spending by US corporations.

The report has observed that while domestic market for IT has grown merely from $2420 million in 2001-02 to $2500 million in 2002-03, exports of software and services has grown from $7680 million to $9500 million.

The report has also mentioned that the rapid growth of IT enabled services and BPO segment has led to the fastest growth of two sectors -- finance, which has gone up by 70 per cent and customer care which registered a 100 per cent rise during 2002-03.

Analysis of software export data and cross-country experience has revealed that there is considerable potential for expansion of exports in tandem with global demand.