STP software exports: STP software exports decline in six cities, data shows

Half a dozen tier-II cities in Karnataka, Rajasthan, and Sikkim reported a decline in exports from the software technology parks of India (STPI) in the past five years. The STP-wise exports dropped in these cities in 2023-24 compared to five years ago, and three of these cities are in Karnataka, according to the official data.Industry experts, however, say the STPI figures don’t reflect the full picture of city-wise software exports. Some of the exports have moved away from STPIs into special economic zones (SEZ) and recorded impressive growth.

Karnataka’s IT/BT minister Priyank Kharge said a lot has changed since the Centre came up with the STPI scheme three decades ago. Many exports of services have moved into SEZ, finding the SEZ scheme more attractive, he told ET. Many small and medium-sized software exporters are not registered under the STPI, he added.

“We have policies for almost everything, and they are quite beneficial to investors. Companies are also moving up the value chain, and we have always suggested to the companies to think beyond STPIs and do something out of the box,” Kharge said. He also added the Centre must give new directions to the STPI policy, in line with the changing trends in the tech sector.

Karnataka Digital Economy Mission chairman BV Naidu said the STPI accounted for 60% of software exports from Bengaluru while 40% came from companies operating out of SEZs. “In Mysuru, Mangaluru and Hubblli, STPI exports are only less than 30% while 70% came from the units in SEZs and other smaller companies,” he said, pointing to the export trends in tier II cities. Bengaluru has retained its pole position in STPI software exports growing from Rs 1,92,615 crore in 2019-20 to Rs 4,07,089 crore in 2023-24.

In Mysore, Naidu explained, the total exports were about Rs 5000 crore, but STPI exports accounted for only about Rs 1000 crore. Non-STPI software exports are about Rs 3000 crore and exports worth Rs 1000 crore came from electronics hardware technology park (EHTP). They together make up about Rs 5000 crore, he said.

In the last couple of years, industries in Mysuru, Mangalulu and Hubballi have shown significant growth with about 46 new companies coming up as the government promoted investments in regions beyond Bengaluru, said Naidu, who is also the managing partner at the venture fund Startupxseed Ventures. “Mysuru is also the second largest software exporter in the state, emerging as a favourable destination for software testing, web designing, web development and media companies.” STP-wise software exports from 2019-20 to 2023-24

(Rs in crore)