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Saturday, January 5, 2013

Nasscom's new strategy for Indian IT

BANGALORE: With Europe in recession and the US likely to slow down, IT industry body Nasscom has prepared a strategy for Indian IT to expand in under-penetrated but growth markets like Latin America, China, Canada, Japan, Africa and the Middle East.

Nasscom is in dialogue with its counterparts in these countries and also in touch with various government authorities through India's external affairs ministry to understand what needs to be done to remove bottlenecks and improve trade interactions. The lobbying body is also taking special delegations to these regions and working on country/market reports and case studies to increase awareness about the business potential of these markets among its member companies. Nasscom president Som Mittal told TOI, "We have progressed quite a lot with our plans and it is currently in the implementation stage. It is important for enterprises to enter under-penetrated markets and also to intensify their focus on geographies that offer sizable expansion opportunities."

Currently, the US and UK account for 78% of the country's IT exports, 12% comes from the rest of Europe, and just 10% comes from the rest of the world. China accounts for just 2% and Japan 1%. Nasscom is trying to change the mindsets of some of these countries about India and outsourcing to India. These Chinese and Japanese markets are slowly opening up to Indian companies. Some companies are establishing country desks there. "Some are entering into local business tie-ups like the one TCS has with Mitsubishi in Japan and with Bank of China and Hua Xia Bank in China," said Mittal.

China's domestic market is largely driven by the government, which also influences over 150,000 state-owned enterprises with huge IT budgets. Therefore the opportunity is very large.

Krishnakumar Natarajan, vice president of Nasscom and CEO of Mindtree, said, "China and Japan have the potential to replace UK as the second largest IT export destination for India.''

Africa consists of 54 countries with a population of over 1 billion. Research firm IDC estimates Africa's IT market will reach $26.53 billion in 2014. ICT is high on the agenda for many governments in the region including Egypt, South Africa, Ghana, Kenya, Rwanda, Uganda and Malawi.

Mittal said Africa has a "reaching out" issue. "It also faces talent shortage. We are working with various agencies in the region to explore business/investment opportunities, joint ventures/partnerships between African and Indian companies," he said.
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