Washington: Led by the Indian services sector, private enterprises helped South Asia buck the global economic downturn and maintain annual growth at around five per cent, the International Finance Corporation (IFC) has said.

The services sector in India was "at the forefront of the growing global market in services" and attracted a good chunk of the fast-growing outsourcing business, the IFC annual report, released by its executive vice president Peter Woicke on September 15, said. IFC is the private sector lending arm of the World Bank group.

The Indian software industry, the report said, experienced tremendous growth, exceeding $ 12 billion in revenues in 2002. Software exports increased 30 per cent during fiscal 2002 to reach $ 10 billion, despite the downturn in the global Information Technology (IT) market.

Woicke said in fiscal 2003, IFC committed $ 350 million as investments to manufacturers seeking to achieve international competitiveness.

Indian companies among these included automobile manufacturer Telco, tyre manufacturer Apollo Tyres, Alok Industries, specialised steel wire and rope producer Usha Beltron, producer of polypropylene film packaging Cosmo Films, and construction and engineering group Larsen and Toubro.

These companies were bringing new technologies to the South Asian market that were both more cost- effective and more environmentally friendly, the report said.

IFC, however, added that to remain competitive globally, the Indian IT industry would have to move into higher value-added products and services.

An important step in this regard was being taken by venture capital fund New Path Ventures, which was launching several new companies in the field of semiconductor chip design and embedded software, IFC said.

The fund would use India's high skill base and lower cost structure to compete with more established international chip design companies.

IFC invested $ 10 million in equity and quasi-equity of selected subsidiary companies. Unlike a traditional venture capital fund, New Path Ventures would pursue new business opportunities by drawing on the extensive background of its sponsors – non-resident Indians (NRIs) based in Silicon Valley.

These professionals, IFC said, had a world-class track record in the semiconductor design industry and boasted the combination of high-level experience, skills and relationships needed to make entry into this market a success.

Woicke said IFC's capacity-building products in India included one in West Bengal and another in the North East, where help would be given to smaller entrepreneurs to get access to financing, to market themselves better, etc.

Two short films, both featuring India, were shown as a prelude to the press conference in which the report was released.

One of the films showed the all-weather "hole in the wall" computer, which can be left in the open, where boys and girls in an Indian school with no previous computer training learn to use it by themselves. The other was on outsourcing of medical records, backed by IFC, sent from the US to India, which are returned in proper form the same day.

PTI