I thought I knew the answer to this one. Turns out, the correct answer is “it depends”.
The GoI puts out a number which is called “Miscellaneous- of which Software Services” or Software Services in short. This data is available on the RBI website. The number for 2008-09 is $46.3 B (yes, the RBI does give data in both Rs. and USD).
This number comes from the Balance of Payments report. Software Services is actually not clubbed with Exports. It is part of Invisibles, along with Travel, Financial Services etc. – services that can be sold to parties outside the country but are never “shipped”.
This Software Services number includes both IT Services and BPO (and all other variants of XXS and XXO) but includes only revenue from billing done by Indian companies or Indian subsidiaries to their foreign clients or foreign parent companies. The problem with this number is that for an Indian company like Mindtree with no subsidiaries it will be pretty close to actual revenue, but for a company like Cognizant it will be what the Indian sub bills the parent for services provided. In all likelihood this number will be cost plus something like 15%, which is well below the typical mark up on offshore services of more than 100%. Additionally, for Cognizant the entire onsite revenue will be excluded.
I actually didn’t really check if Mindtree has foreign subs or not, but if it did then the RBI number would exclude the subsidiaries’ revenues, including only the Indian parents billing on the subs.
So, as you can see, the $46.3 B number is well under what you would consider the true revenue of the Offshore industry, which includes onsite operations related to the offshore business.
NASSCOM tries to correct for this revenue by including the revenue of foreign subs, but I don’t believe it does anything about the Cognizant situation where a foreign company has a sub in India. In truth, that is a slippery slope and it shouldn’t even attempt it. To figure out the onsite revenue associated purely with the offshore business is impossible to orchestrate over all companies. Imagine trying to do that at Accenture or Keane.
Also, included in the RBI number as also in the NASSCOM number are exports from Captives where onsite operations may not even be meaningful.
Anyway, that answers the question that used to puzzle me for the longest time – why are all the charts for software exports and not the Industry revenue? Sometimes you measure what’s measurable and leave the rest as an exercise for the reader.
By the way, I had been tearing my hair out trying to get the net Exports data for the IT-BPO industry. Finally found it when I came upon the RBI database dbie.rbi.org.in/ which is quite comprehensive and easy to use, though difficult to find. I sent some feedback. They fixed the data and sent me an email in one day! On the other hand, I sent an email to NASSCOM’s research department. No reply after a week. Go figure.