India's industry is showing signs of a revival on the back of a strong domestic market, the head of a leading industry association said on Friday.

Ashok Soota, president of the Confederation of Indian Industry, told a news conference that sales of nearly 50 industrial sub-sectors surveyed by CII grew 15 per cent or more in the past year ended March.

"At this stage there is no slowdown effect," he said. "The domestic economy is capable of picking up a large part of the slack (that could result from the Iraq war)."

Soota said he stood by his earlier forecast of a healthy six per cent GDP growth in the current year that began on April 1.

India's economy, Asia's third-largest, is estimated to have grown by 4.4 per cent in 2002-03, slower than 5.6 per cent in the previous year, due to a fall in farm output following a drought.

He said a prolonged war could hurt the world economy including the United States, India's biggest software customer and affect exports and profit margins in the sector.

"Clearly, if it (the war) goes beyond three or four weeks to 45-60 days and a messy aftermath, the whole world will get affected," he said.

CII officials said the order book of software exporters could be hit by cancellations of visits by customers due to the war and to some extent by fears resulting from the Severe Acute Respiratory Syndrome virus disease affecting some Asian nations.

But orders could be made up later in the year, they added.

India's software industry is expected to have increased exports by about 30 per cent in the past year to March from $7.5 billion in the previous year.