NEW DELHI (AFP) -- India's flagship outsourcing sector, hit by the global economic crisis, cut its export growth forecast Wednesday but said it would still be one of the world's fastest-growing industries.

The National Association of Software and Services Companies (NASSCOM) had originally projected export growth for this year of 21-24 percent to 50 billion dollars. Revenues grew by a blistering 28 percent in the previous year.

The lower forecast came as the sector is recovering from a massive accounting fraud at India's fourth-largest outsourcing company Satyam and a lacklustre quarterly earnings season.

US and other foreign firms, drawn by India's vast, educated English-speaking work force and labour costs that are much lower than in the West, have made a beeline for the country, farming out everything from answering bank client calls to processing insurance claims and equity analysis.

But the recession in the United States, which accounts for 60 percent of industry revenues, and other parts of the world has now put a crimp on customer spending.
Mittal told a news conference here that it was "time to move on'' from the "one-off fraud'' at Satyam to focus on the global downturn and how to deal with it.

India's IT sector has been on the defensive since the scandal broke in early January, looking to rebuild trust with its clients.

B. Ramalinga Raju, founder of Satyam, is in jail facing accusations of cheating and forgery after declaring he falsified one billion dollars on the balance sheet and inflated profits.

Aside from the economic downturn, NASSCOM said the sector was facing other challenges such as protectionist sentiment, especially in the United States where President Barack Obama has promised to create jobs "that can't be shipped overseas.''

NASSCOM said it would send a delegation to the US later this month to meet with government officials in order to explain how outsourcing could help firms be more competitive and beat the global economic malaise.

Pramod Bhasin, vice-chairman of NASSCOM and head of business processing outsourcing (BPO) company Genpact, said he believed US companies would continue to outsource as India "can help them achieve the efficiencies they badly need.''

Mittal said while North America remains the largest market, there were what he called "significant untapped opportunities'' in Europe, North Africa, the Middle East and Japan.

The group said it had postponed by one year its goal of clocking export revenues of 60 to 62 billion dollars and now expected to attain the figure in the financial year ending March 2011.

The domestic IT market grew by nearly 20 percent to push the total IT-business process outsourcing market to 72 billion dollars.

The sector, which accounts for 5.8 percent of India's GDP, has played a key role in fuelling the country's new middle class affluence, employing 2.23 million people directly and eight million indirectly.