The Hindu : Business : Chinese city beckons Indian IT cos

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Tuesday, May 12, 2009
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Chinese city beckons Indian IT cos

Special Correspondent

Partnership will enable BPO firms to service markets in Japan, Korea and in the ASEAN region

Lower tax rates a major incentive for offshoring in Nantong

— PHOTO: K. MURALI KUMAR

JOINT EFFORT: Flora Tian (left), President (ICEC Council), Chen Xiao Dong (centre), Vice-Secretary & Vice-Director (NETDA), and Mohan Suresh, President (FISME), at a press conference in Bangalore on Monday.

BANGALORE: A five-member delegation from the city of Nantong in China was here on Monday to woo Indian IT and BPO companies to establish partnerships with Chinese companies to jointly reach out to markets in East Asia.

Chen Xiao Dong, Vice Secretary and Vice Director, Nantong Economic and Technological Development Area (NETDA), said Nantong’s “highly skilled labour force” could enable Indian IT and BPO companies to service markets in Japan, Korea and in the ASEAN (Association of Southeast Asian Nations) region.

Mr. Chen said the lower tax rates on companies operating in NETDA and the financial support provided by the Chinese Government were major incentives to encourage offshoring from Nantong. He said large multinational companies preferred “not to put all their eggs in one basket.” They would rather “diversify their offshoring locations to minimise risks”, he added.

Mr. Chen said major Japanese corporations had already established their bases in Nantong and invested about $5-6 billion in facilities there. Referring to the difficulty that Indian IT and BPO companies faced in addressing the Japanese market because of “cultural constraints”, Mr. Chen said Indian and Chinese companies could jointly service the outsourcing business that lay untapped.

He pointed out that revenues from Japan constituted only about six per cent of the Indian IT and BPO companies.

The delegation’s visit to India is being coordinated by Beijing-based India-China Economic and Cultural Council (ICEC) and the Federation of Indian Micro Small and Medium Enterprises (FISME).

Anil Bhardwaj, Secretary-General, FISME, said the sever recession in the advanced economies required Indian companies to adopt a “look east policy” because the East Asian economies were relatively better off in these times. He pointed out that the impending accession of India to the ASEAN Free Trade Agreement gave the partnership with China added relevance.

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