The Hindu Business Line : Japan, Taiwan, France are good bets, says Nasscom

THE Indian software and services sector needs to actively explore high-potential regions such as Japan, Taiwan and France — the best available outside of the traditional US market, says a study by the National Association of Software and Service Companies (Nasscom).

Japan is India's third-largest export destination after the US and the UK and could become a $2 billion business opportunity by 2008, according to analysts.

Tough to penetrate, the Japanese market can yield good results if specific IT requirements are addressed. Indian companies can focus on the following areas:

Providing solutions and expertise in the local language.

Lobbying for removal of withholding tax and the other procedural bottlenecks.

Campaigning for multiple entry visas for easy access.

Opting for innovative core products, build a range of niche products in the ERP, CRM and SCM space.

Focussing on indirect sales, in partnership with domestic systems integrators.

While Taiwan is the manufacturing hub, India is now considered a global services hub.

Taiwan's hardware prowess is more than matched by India's software strengths. Both countries boast of an abundant, skilled, technical workforce and consider ICT as a strategic sector for global leadership.

Research and development continues to be a major area of focus and key driver of the Taiwanese industry. India enjoys a significant edge in both R&D and embedded systems development.

Indian companies can tap the following potential segments:

Banking, securities, telecom, energy and utilities for systems integration.

Partnering with Taiwanese companies to combine market access with domain expertise or project management skills.

Leveraging large pool of science and technical graduates employed in the semiconductor industry.

Developing cost competitive infrastructure in Taiwan for accessing other Asian markets.

Collaborating with Taiwanese vendors/ users for embedded/R&D services outsourcing to India

Estimated at $48.2 billion in 2002, the IT market in France ranks third in Europe. It is also the leading European nation in IT software and services.

The packaged software market is considered a hot growth segment and was valued at $7.6 billion in 2002. It is anticipated to grow at a rate of 8 per cent.

Indian firms should also look at the following areas — verticals such as banking and financial services, trading and distribution, utilities and the public sector and developing expertise in consulting services.