An interview with Ms. Sangeeta Gupta, the Vice-President of the NASSCOM
RIA Novosti, New Delhi
- Could you be so kind to describe in some words the present state of the Indian IT-market?
- The Indian IT industry has today become huge driver of Indian economy. In the last financial year 2004-05 the entire Indian IT industry will estimate to be a 28 billion dollar industry that employed approximately 1 million people and is accounting for about 3 to 4 % of Indian GDP. Exports account for a bulk of the indianite industry over 70 million dollars of exports. The Rest of the industries is the domestic software market and the hardware industry. The industry in India has a good mix of large Indian companies, multinational companies as well as young starter that are either developing new innovative products & services to serve the international market. US have been in India , largest export destination accounting for approximately 67-70% of the market followed by UK and rest of Europe . What we finding is that exports are currently more dominated towards the English speaking markets but the Indian companies is increasingly looking at how they can passed along to address the non-English speaking market.
- India is today one of the world's leaders in outsourcing. On what basis Indian companies build their strategies in outsourcing activities?
- Being in Europe, India has partners in Europe . UK has been a single biggest market in Europe accounting for approximately 13-14% of the total export. However, I think with the increased awareness amongst European market has up bound the advantages of outsourcing. There is inherent interest from may more countries in non UK Europe to work with Indian companies also Indian companies are increasingly looking at newer model in working in Europe . Many Indian companies are setting up center in Eastern Europe to be able to serve in European market. The companies like Tata Consultancy Services have a development center in Hungary through which they are servicing the European customers, or Pro-C, which is subsidiary of Infosys, has set up a center in Czechoslovakia to serve its own market in Europe . So we are looking at different business models but we believe that Europe is an important partner to Indian IT industry they would continue to work with us. Of course the language has been an issue and that’s why we feel physical presence in Eastern Europe , which helps to overcome the language gap also.
- And what about your eastern neighbors? China, for example, seems to be a very serious competitor, if not rivals, for Indian programmers.
- If you look at China in general is very large market and is the market, which is more domestic than Indian IT market where we are more export laid market. We believe that while China will be competitive to Indian IT industry as export market. There is enough opportunity for both of us to partner and to work together. Indian companies are growing up in Eastern Europe . We have Indian companies, which are setting up development centers in china in which they employed local Chinese. As far as servicing other Asian market like Japan or Korea . So you know Infosys has a center Satyam has a center. NIIT is doing lot of IT training in China . So, it is going to be both the competitor as well as partner going forward in Asian market. Japan is a huge market. It left 92% of Indian export. It’s a market where there is a gaining increased interest to work with Japanese companies and Indian companies have started to conduct language training programmes to be able to trained there professionals in Japanese language to serve the Japanese market. In terms of other market, Australia is a focus now scene you know more Australian companies again wanted to partner or outsource to India . Singapore has been traditional hut for lot of Indian companies took for the South-east Asian market region. We find that out of 900 members, NASSCOM has almost 100-150 of them that has occupation in Singapore already. So we are the key player in Asian market although my not account for the large percentage of our export.
- And how do you see the role of the NASSCOM in the Indian IT-sector?
- You know currently that is one of the initiative again that has NASSCOM has started to facilitate industry academic linkages. Currently there are some linkages but it is restricted to the top engineering colleges like IIT, IMS, Indian Institute of Science would work with industry either in research projects, training program. But as NASSCOM has realized that if we need to grow the industry forward we need to work with the many of the smaller engineering colleges which are not in metro politician cities but are in towns you know smaller places in the country. We have done MOU with the University Grant Commission and All India Council of Technical Education when we are started a special program. You know where we bring some faculties together and get the industry to talk to them as a first step as a second step a company is taking over MA level students of an institute by which they can have them with curricular with training programs, with projects. That’s what we hope will build the next generation and get professionals in India .
We are happy to share model but what we found in other countries is that we have much stronger linkage standard in India but their linkages are more towards research project. We are first thinking on just reaching the skill gap that is currently exists. But research linkage is currently deceasing. All the way must be 300 thousand engineering graduates out of our colleges every year. That is a skill gap issue and we are finding ways how to clinch that huge gap.
- So, one of the main directions for India IT is focus on outside activities. At the same time another tendency is also very clear during some last years. Indians, even those, who receive education abroad, are coming back to India …
- I think what we have scene in the last few years there has been the changing and opening up of Indian economy and lifestyle in India is changing and salaries India is increasing, people expecting Non Resident Indian those who still have there routes in India wants there children to study in India. How may keen to come back to India because now they feel that they go a good salary level it may be not comparable which they get in western market. But given the purchasing prosperity it is very hi-fi Indian standard. They are able to afford a good life style. Children are been educated in India and getting the Indian values which they believe are important for them and also the exposure of work that they are doing is very high today you are not only back office personnel now you are in critical processes either Indian or Multinational companies. Having worked in Indian companies in one of these projects is a very good thing to have in your resume today. So we found lot more interest not only from Indian even from foreigner to work in India . So you know we are working with Indian IT industry today becoming a key to your career path.
- It means that India is open for multinational companies as well as for developing its own industrial facilities. Do you not afraid of possible replacing Indian companies by multinational ones?
- We were amongst the first industry sector, which said that we don’t want artificial barriers between Indian and Multinational companies. We went to the Govt. of India at time when India was very heavily controlled and there was a license needed for everything we want zero duty on import of software into the country, we want Indian or Multinational companies which are present in India able to use the best of what is available globally. I think that is the culture that is existed in Indian IT industry today. When we say Indian IT industry we don’t mean only Indian we mean Indian or Multinational companies located in India . So as NASSCOM also very clearly represent companies in India is not necessarily Indian companies. So I think that they are equal stakeholder in industry and that is the reason they are growing in India also.
I think the Govt. recognizes that the course the provided at level of Multinational sailing to India and set up in India that Indian IT contract recognize. If you look at the quality story in India , India is known for the highest level of CMM level certification in India .
Of course the Motorola center in Bangalore that was the first to get CMM level fine certification as the Motorola center worldwide didn’t have that certification. It is a Multinational company who came into India who brought in a good amount of policies, process excellence that is also help industry to grow. The Govt. recognized that of course the Govt. always have issues related to you known repatriation of profits and ho accounting has been done. But Transco Pvt. is genius coming to industry. That is applicable across industry sector.
- On what administrative and legislative basis do Indian companies work? Are there any differences in conditions for Indian and foreign companies?
- As far as the Government of India is concerned in the IT sector there are no special legislation either for Indian companies or foreign companies, there are equal treatment that is applicable for domestic & foreign firms in India . Foreign company can invest up to 100% equity in the Indian market if they wish to do so or they can partner or have a joint venture with an Indian company. We got good examples in India where companies like Microsoft, Oracle, APC have 100% stake and have 100% subsidies in India , undertaking works in India and are remising profits to the home country. At the same time the Indian companies are also 100% exporter entity like TCS, Wipro and some others and many others who are servicing consumers I Europe, US, or whichever other markets they wanted to do. But for the Govt. point of view they believe that it’s a global industry and having equal treatment for both domestic and foreign firms is very important.
I think you know well the IT sector is concerned they got a very mutually beneficial relationship whether the Govt. understand that this is a sector which is driven by the private industry and the role is largely to facilitate the growth and not be a player in the industry. So what we find that while patented the Govt. has some IT companies like CMC ltd. earlier. They had disinvested those companies, except for some E-governance projects where Govt. of India is still waiting some of its own companies. Largely a sector is dominated by Pvt. Companies and been run by private sector. Govt. of India‘s roe is to formulate policies and procedures to make it to effect the smooth functioning for the companies in large.
- Could you tell some words about the special technical zones in the IT-industry? In experts’ opinion, these zones would play a serious role in future. Is it a truth?
- If you look at how the zones are featured in India . I think that software technology scheme the Govt. of India started has really helped to develop industry but the difference was that it was not the physical zone in itself. As NASSCOM I can be located out of zone but get all the incentives, all the facilities that zone offered. So, that really helped to boost the industry and going forward the Govt. of India has announced special economic zones, which are being set up in different parts of the country. These zones provides one stop place where all the clearances are met, approvals are met. It’s like in someway working in foreign country despite being in this country. So you have all the advantages of domestic loan, which can help to build the growth. It means a success story for India and it would help for a sure.
- What do you know and what do you think about the Russian IT-market? What seems to you the most perspective direction for possible cooperation between Indians and Russians in the IT-field?
- From just an Indian point of view you know this is just something that is mainly on the websites. Russia is very good destination for high-end software development. I think the capability of people there in software engineering is something most people here look after. You know the large number of billion people who can do lot of other task and Russia can play a very high value added software development but it is just a perception and therefore we believe that there is a good match between two.
At the same tine, I think there is very little exposure currently between Indian and Russian companies. We did have a Russian Premier was here in; there was a good interaction. I know some Indian IT companies including I-flex Solution, who set up a center in Russia so there is co-operation but there is a need to have much more awareness building between the two countries, which can be through exchange of mission, through Govt. laid programmes, which can be at association to association level before companies in India and companies in Russia can recognize the strength of both to work together.
This exactly a problem if people don’t know how to go about it and the perception at times on the other side, Indian IT industry is so big and will they going to work with them. You know we have large companies and we got lot of small and medium size companies, which can work with companies in Russia or other CIS countries. NASSCOM would be happy to work with and already looking to work with some of the associations in Russia which have given us programs. We are looking at how we can do that further and also I think there just be through awareness programmes India and Russia has such strong linkages at political and cultural level. It needs to be built in to IT industry.
- Has your company - or, may be, suppose to have - any contacts with Russian IT-companies?
- You know what of course we like to identify some associations like NASSCOM in these countries. We had done in some places but we still trying to do in many other countries to find out what is the companies are currently doing, who are the large players, who are the small players, what kind of work they do, what kind of Universities that you have that producing technical graduates which can either work with Indian or other companies for its development project, what is thrust from Govt. Just a kind of information and then you putting together some platforms mutually where business exchange information happened then you can take it to next level.
Russian IT associations are very keen to work with us. They approach to us we have to send them back our interest and proposals.
At least I think we just scene because they represent the association we represent association, building a platform together which is exchange of information that if Russian companies they could do this association. Even if we can build a platform like that for exchange the information it would be first step forward.
- IT-business today is one of the most dynamic one. Could you make some prognosis for the future of this business in the world perspective?
- What we have scene now is that IT industry is increasingly moving after value chain in someway. If you take an example, BPO in India started with pure voice based call center. Now today companies in India are doing research financial management, risk management and of course gamble taking services. Their employees are very highly professionals to be able to do that kind of work. We see, think and go on forward while you will have always-low value added work. You will be company with increasingly changes business model adapting to higher level of activity. In the IT sector itself if you look at the Indian companies they were essentially doing legacy development and application maintenance with the board. The demand is again higher activities infrastructure management, package of pure implementation, product development, and engineering services. So we are going to see definition of what can be outsourced and what cannot be outsourced are changes very rapidly. You know earlier, it was just defined that some processes, which could be moved out, and today, the technology enable you to keep what can’t be moved out. So, it was the industry and it was the main evaluation of the company that follows sourcing model within Indian and overseas also.
- One of the ways for face-to-face interaction is participating in common events. Is there any in India in the nearest future?
In December NASSCOM organizes the InfoCom-2005 event and association with Business World, which is one of Indian leading business magazine .The focus of the event, is really to build IT industry in India . It is currently we see the Indian IT industry very heavily centered on South of India. Nescom will be taking initiative and we need to build the industry in Northern India, Eastern India . In West India it does exist in Mumbai, Pune may be not in other sector that much so. From Nescom prospective the basic is to provide a platform where global companies can come and participate and see what Eastern India hopes for in terms of IT sector. So there will be exhibitions there, conferences there.
Another one is the “India Leadership Forum”, also organized by NASSCOM on 14-16th February in Mumbai. It is the largest event for IT sector. That is the one platform where we may have approximately 1500-2000 people from across the world.
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