The main threat to the Indian software industry is not the ongoing slowdown in the US economy but inclination of consumers to use pirated software.

This is the message Atul Nishar, member executive council and past chairman of the National Association of Software and Services Companies (Nasscom) drove home during his talk at a seminar on Copyright Issues and the Software Industry in India.

Mr. Nishar clearly highlighted the fact that the growth figures for the Indian software industry as projected at an estimated $50 billion by 2008, in a study conducted for Nasscom by McKinsey & Co., cannot be achieved unless software piracy is completely eliminated. He believed that a large part of this growth would have to come from products created by the Indian industry and, for this, it was imperative to curb and eliminate the menace of software piracy.

Ironically, Mr Nishar was confident that the growth rate of 35 per cent assumed by the McKinsey study would be achievable this year, despite the general slowdown in the US economy, which has been the industry''s largest market.

India has always taken a lead in curbing software piracy and this is clearly evident from the fact that it had the Intellectual Property Rights Act as well as the Information Technology Act already in place. India is the 12^th country in the world to implement cyber laws, which also cover crimes involving electronic signatures. The IT bill 2000 lays out stringent punishment for cyber crimes and this should herald a legal and secure e-commerce and e-banking activity in India.

Further, the amended version of the Indian Copyright Act 1957, which came about through the untiring efforts of Nasscom, proved to be a great boon for the Indian software sector.

According to Nasscom estimates, from 89 per cent in 1993, software piracy declined to 68 per cent in 1997 and further to 59 per cent in 2000, as a result of implementation of the amended form of the Indian Copyright Act. Nasscom estimates this to drop further down to 25 per cent by 2005.

According to Mr Nishar the amended version of the Indian Copyright Act is not only amongst the toughest but also one of the few IPR laws in the world, which mandates imprisonment as well as fine. The only thing left to the discretion of the court is the quantum of the punishment

The direct impact of this enactment was clearly felt by the industry, which saw exports growth rate increase from 35 per cent to 55 per cent annually, whereas domestic market growth rate rose from 20 per cent to 40 per cent annually. The enactment also saw the introduction of 104 new software products and packages in the country.

Mr Nishar lauded the efforts of Nasscom, which in alliance with the US-based Business Software Alliance (BSA), had carried out an awareness campaign post 1995, including organising 50 seminars between 1996 and 2000. BSA is engaged in promoting the growth of the software industry education and enforcement programs and also initiates audits of organisations suspected of using illegal software. In India the Nasscom-BSA alliance has trained the police and the judiciary and facilitated police raids and civil action on parties indulging in software piracy.

According to Vanessa Hutley, vice president BSA, software piracy results in a loss of $12.1 billion in retail sales worldwide. In the Indian context Ms. Hutley estimated the loss of business opportunity due to software piracy at $250 million.

Ms. Hutley stated that buying a software program is only a license to use and does not impart ownership to the buyer. She also clarified that making more copies than specified in the agreement is also tantamount to piracy.

End user software piracy occurs when

• One disk is used to install a program on multiple computers.
• Copying of disks is resorted to for installation and distribution.
• Advantage of upgrade offers is taken without having a legal copy of the version to be upgraded.
• Software is downloaded from the internet and
• Disks are swapped in or outside the workplace.

Pointing out the reasons for piracy being rampant Ms. Hutley said that one of the basic reasons was the lack of awareness among end-users about the consequences of using pirated software. She said the Indian Copyright Act, one of the toughest IPR laws in the world, allowed stringent punishments on users of unlicensed software including civil and criminal charges. Apart from legal repercussions, she pointed out, use of insufficient licensed software results in tarnished market image of the organisation as well as damages goodwill.