Software export registers excellent growth
Export of software and IT enabled services from Bangladesh recorded a 72 per cent increase in the first seven months of the current fiscal (2011-12) over that of the same period of the previous year.
Low cost of software designing and development, JP Morgan's positive report on Bangladesh as outsourcing destination and inclusion of Bangladesh by Gartner in its top 30 outsourcing destinations are helping the country to get an increased volume of software export orders.
Many global companies are targeting Bangladesh where cost of software development is lower than in India, Sri Lanka and other Asian countries due to its pool of talented young IT Professionals, slogan for digital Bangladesh, attractive software exhibitions and positive reports by some world's consulting agencies, said Mahbub Zaman, president of the Bangladesh Association of Software and Information Services (BASIS)
He expressed the hope that export orders would continue to rise provided the country was connected with an alternative highway so that it remained connected in case of any disruption in the existing connection with the information super highway. An alternative connection is important for getting software export orders as the buyers want uninterrupted communication and they want their work completed within lead time.
Zaman also suggested for terrestrial connection with the super information highway as an alternative and reserved link and also added that Bangladesh needs to ensure both telecommunication and physical infrastructures for development of the sector and attract the foreign buyers by offering skill, competitive prices and quality of work.
He said that the government has proposed Tk. 7.0 billion investment in its ICT policy. But as far as budgetary allocation is concerned, the policy has been by and large ignored. He demanded an allocation, at least 10 per cent of the proposed fund, in the upcoming budget for ICT development in the country.
"Software industry has been enjoying tax holiday since 2001 and the facility will continue until 2013. So, I think there is no tax problem in this sector at this moment. After expiry of the tax holiday, we feel that the government should renew it for the ICT and software industry development. I think, the government should withdraw tax on use of internet to make it more affordable for public in the coming budget," he said.
The ICT policy provides for an allocation of at least 1.0 per cent of the revenue budget and 2.0 per cent of the development budget to the ICT sector every year.
A software exporter who is also a member of the BASIS said that the proposed extension of the ICT incubator from its existing office to Janata Tower of Kawran Bazaar in Dhaka and the ICT Palli (ICT Park) at Kalioir in Gazipur are also yet to be implemented. The progress in this connection has been very insignificant.
Sirajul Islam, research associate of the association said in the first seven months of the current fiscal the export earnings from software and IT-enabled services stood at USD 38.47 million, compared to that of USD 22.21 million in the corresponding period of last fiscal. He expects the total export amount in the current fiscal to exceed USD 60 million.
Islam said, currently number of registered software and information technology-enabled services (ITES) companies are more than eight hundred until April, 2012. The government approximately earns USD 259 million including export earning from this sector, he claimed.
A total of 150 companies are already registered for export of software and the number of export destinations are more than 60, Islam said and added that 30 thousand professionals, majority of then IT and other graduates are employed in this industry. Over 70 per cent of the companies are found to be involved in development and maintenance of software for their clients. In total, almost half of the surveyed companies are involved in providing a wide range of IT enabled services (date/form processing, graph/web design, content management and others).
Around one third of BASIS member companies are 100 per cent export-oriented and their main export destinations are North American countries (mainly the USA, a major part of business in the US market is still done through NRB linkage) while in countries in Europe like the UK, Denmark and the Netherlands have emerged as major importer of IT products from Bangladesh during last few years, the research associate said.
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