With the growth in the domestic market, government spending, and with the advent of 3G and broadband, Small and Medium Enterprises (SMEs) are likely to have more opportunities in the IT space, said Som Mittal, President, The National Association of Software and Service Companies (NASSCOM).

Mittal told SME Times, "There are new opportunities that are coming in the way of SMEs in India. India's domestic spend is going up and more and more companies are focused there. Secondly, many small and medium sized companies are very innovative. So, with increased Internet penetration, 3G coming in as well , we have huge opportunities. So, domestic market, government spending, 3G and broadband are four big drivers for SMEs."

"And, what solutions SMEs can generate here will be available globally as well. I think that what we are looking at is a positive development for the SME market," he added.

He also reiterated that the Small and Medium Enterprises (SME) segment is another important segment that the IT sector will have to look at. While the IT industry expands to new geographies and new verticals, it will also have to look at the SME sector more deeply.

Further, opining views on the growth expected for this financial year, he mentioned, "The industry is growing comparatively well. We are concerned about what can happen in long-term because of the European crisis."

He urged the industry to wait and watch the developments taking place in the key markets such as US and Europe. Stating that he said, "But from business perspective, business continues to grow in Europe. As far as currencies are concerned, there are certain factors which are driving it. It is very difficult to make up the loss as there is some movement happening between dollar and euro. There is a rupee-dollar movement that is also going on."

He added, "If you look at it, overall these currencies will remain a bit volatile." When asked whether the currency movements would be volatile for this complete fiscal, he said, "It is very difficult to forecast whether the currency will remain volatile during the current fiscal."

He also mentioned that Indian IT industry needs to think of ways for managing the currencies as it has a positive and negative impact on the industry. But, he does not think it is impacting business-to-business growth otherwise in the Indian IT and BPO space.

Further, Mittal underscored views on the growth prospects and said, "I think the first part of this fiscal it has been positive. Most companies have raised their guidance for the year in terms of growth. And, NASSCOM has given a forecast of 13-15 percent growth for this fiscal."

"I think the 13-15 percent growth will be there, given the circumstances that we are coming out of downturn and economic revivals in the country that we operate not necessarily happened. But, there will be a substantial growth," he said.

"In all the three sectors, which are the Information Technology (IT), Business Processing Outsourcing (BPO), and Engineering Services, we are seeing growth. The growth will be more in the BPO because BPO have many drivers and new services are also coming in. It is also a matter of penetrating markets. So, relatively the BPO will grow faster than IT and Engineering Services. And, it looks positive," Mittal added.

NASSCOM earlier projected that India's BPO sector is expected to grow 15-16 percent this fiscal. The BPO industry has grown enormously in the last 10 years but there are many challenges to tackle. The Indian BPO sector is facing huge challenges in the areas of talent and infrastructure.

Moreover, NASSCOM has also forecast that exports would rise to $57 billion (Rs 2.65 trillion) in the year to next March from $49.7 billion in the last fiscal.