SME Times News Bureau | 01 Aug, 2019
In a meeting with
senior managers of IT companies on Wednesday in New Delhi, Union Minister of
Commerce & Industry Piyush Goyal urged Indian IT companies to explore new
markets.
The meeting was
held to discuss opportunities for Indian IT companies to invest and grow their
business in new markets like the Nordic countries, Eastern and Central Europe,
Canada, Australia and Africa and also explore avenues for greater investments
and growth in East Asian markets like China, Japan and Korea.
India’s IT
industry contributed 7.7% to the country’s GDP in FY 2017 and is expected to
contribute 10% of India’s GDP by 2025.
According to
NASSCOM, the sector aggregated revenues of USD 160 billion in 2017. The United
States account for 2/3rds of India’s IT services exports.
India’s IT and
ITeS industry grew to USD 181 billion in 2018-19. Exports from the industry
increased to USD 137 billion in FY 2019 while domestic revenues (including
hardware) advanced to USD 44 billion.
During the
discussions with Commerce and Industry Ministry, the representatives of the
companies informed that although the Chinese IT services market is the third
largest in the world India’s investments and business have not been able to
grow in China due to various non-tariff barriers and challenges faced by Indian
companies to set up their entity in China.
Market access
issues that create hurdles for Indian companies to open their business in China
was also discussed.
The top five
Indian IT service companies like TCS, WIPRO, Infosys, Tech Mahindra and HCL are
doing business in China for more than a decade and are employing 90% of local
people in their China operations but returns are very low and therefore Indian
IT service companies are not showing much interest to invest and expand their
operations in China.
Commerce and
Industry Minister during the discussions requested National Association of
Software and Services Companies (NASSCOM) and the senior managers of the
companies attending the meeting to share specific data regarding non-tariff
barriers being faced by them in China and other East Asian markets.
Government of
India will give all support for the global growth of India’s flagship industry
and will make all efforts to facilitate the IT service industry and for that it
is ready to engage with China and also Japan and Korea, informed Piyush Goyal.
Commerce and
Industry Minister urged India’s IT services companies to explore other markets
and not be inhibited in operating in countries that are non-English speaking.
He urged the top
five Indian IT firms to create a corpus that will be spent on training manpower
in languages like Mandarin, Japanese and Korean for accessing the markets in
these countries.
The meeting was
attended by senior managers of TCS, Satyam Venture engineering, HCL, NIIT Tech,
Infosys, Invento Robotics, Tech Mahindra and WIPRO. Sangeeta Godbole, DG of
Services Export Promotion Council (SEPC) and President of NASSCOM, Debjani
Ghosh, were also present during the discussions with Commerce and Industry
Minister.
India is the
largest exporter of IT services in the world and exports dominate the Indian IT
industry and constitutes about 79% of the total revenue of the industry.
India’s IT service
sector is now gearing up to be the digital partner of intelligent automation
like smart algorithms, bots and AI tools, which are fast becoming a part of
every industry and an increasingly digital world.