Sunday, October 2, 2022

Goyal urges IT industry to look to Europe, East Asia for business

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New Delhi: Union Minister of Commerce and Industry Piyush Goyal urged Indian IT companies to invest and grow their business in new markets like the Nordic countries, Eastern and Central Europe, Canada, Australia and Africa. At a meeting, Goyal urged industry leaders to explore avenues for greater investments and growth in East Asian markets like China, Japan and Korea and get over the language barrier by preparing a workforce that can communicate in languages like Mandarin, Japanese and Korean.

IT industry contributed 7.7% to GDP

India’s IT industry contributed 7.7 percent to the country’s GDP in FY 2017 and is expected to contribute 10 percent of India’s GDP by 2025. According to NASSCOM, the sector aggregated revenues of $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 $181 billion in 2018-19. Exports from the industry increased to $137 billion in FY 2019 while domestic revenues (including hardware) advanced to $44 billion.

‘India IT businesses facing growth barriers in China’

During the meeting, the representatives of IT companies informed Goyal 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. Issues pertaining to market access that create hurdles for Indian companies to open their business in China were also discussed.

The top five Indian IT service companies like TCS, WIPRO, Infosys, Tech Mahindra and HCL have been doing business in China for more than a decade and are employing 90 percent of local people in the country but returns are very low and therefore, Indian IT service companies are not showing much interest to invest and expand their operations in China.

Goyal seeks details

Goyal 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. He assured that the government 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.

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.

Who attended the meeting?

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 at the meeting.
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