India recorded a one percent drop in software piracy last year but this was lower than the rates achieved by China at four percent and Russia at three percent.

These are among the findings of the fourth annual Global PC Software Piracy Study released by the Business Software Alliance (BSA), an international association representing the software industry.

India BSA chair Sanjay Gupta said, "A drop of one percent in the piracy level in India this year is definitely encouraging. However, the drop rate is low compared to the reductions achieved by China (four percent) and Russia (three percent)."

The study was conducted independently by IDC, the IT industry's leading global market research and forecasting firm, according to a release.

Gupta said: "According to an economic impact study by the IDC, published in 2005, if India can reduce the piracy rate by 10 percent by 2009, the country will be able to add 115,000 new jobs in the IT industry. We can expect an additional investment of $5.9 billion into the economy, resulting in an increase in tax revenues to reach $386 million," Gupta added.

The study has revealed that 35 percent of the software installed in 2006 on PCs worldwide was obtained illegally, amounting to nearly $40 billion in global losses due to piracy.

Jeffrey Hardee, BSA vice president and regional director for Asia, said, "Of the 15 individual markets examined in the Asia Pacific region, the rate of piracy actually dropped in 11 and stayed the same in four. Despite these results, the average piracy rate for the region increased by one point to 55 percent.

"This seems counter intuitive but China and India's share of the PC market in the Asia Pacific region grew from 42 percent in 2005 to 46 percent in 2006 and this has the mathematical effect of dragging the regional average upward toward the China and India average, even though the piracy rates in both countries came down in 2006."

Hardee also noted that despite the piracy rate reductions in most countries in the Asia Pacific region, losses from piracy in the region increased by 44 percent to 11.6 billion in 2006.

Of the 102 countries covered in this year's study, piracy rates dropped moderately in 62 countries, while increasing in 13.

"The good news is we are making progress, however, we still have a lot of work to do to reduce unacceptable levels of piracy," said BSA president and CEO, Robert Holleyman.

Worldwide, for every two dollars of software purchased legitimately, one dollar was obtained illegally, the report says. Global losses increased in 2006 by more than $5 billion over the previous year.

China's piracy rate dropped four percentage points for the second consecutive year and has dropped 10 percentage points in the last three years, from 92 percent in 2003 to 82 percent in 2006.

By reducing China's piracy rate, $864 million in losses were saved, according to IDC. The reduction in the piracy rate and the savings are the result of government's efforts to increase the use of legitimate software within its own departments, vendor arrangements with PC suppliers to use legitimate software and increasing industry and government education and enforcement efforts.

The legitimate software market in China grew to nearly $ 1.2 billion in 2006, an increase of 88 percent over 2005. Since 2003, the legitimate software market in China has grown over 358 percent.