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The US and Europe form bulk of IT and BPO industry’s revenues. The two geographies contribute to about 80 per cent of the Indian IT exports, often exposing the industry to the vagaries of the turmoil in those regions.
Despite the serious quest to tap other markets such as Japan to reduce the risks, the IT industry could not make much headway for different reasons. The Nasscom, which has begun a serious effort to crack the Japanese market two years ago, feels that India is poised well now to tap the opportunity.
The second biggest IT market after the US, Japan is a difficult market to handle. It contributes less than 2 per cent to the IT services exports from India. With over $108 billion worth IT services market, Japan has potential to emerge a lucrative alternative market for the Indian industry after the US and Europe.
The Nasscom puts the offshore component in Japanese IT services market is only 10 per cent, offering a huge scope. China currently dominates bagging over 50 per cent of the offshore business from Japan.
“Japan won’t happen the way it happened with the US. It’s a completely different market. There are several challenges involved in cracking it,” R Chandrashekhar, President of National Association of Software and Services Companies (Nasscom), told BusinessLine .
He feels that both sides must recognise the challenges. “Japan expects the Indian IT firms to function the way it wants. This won’t happen overnight. Both sides need to travel a distance. We are happy with the progress we made,” he said.
The former Union Telecom Secretary said that though there was a realisation of the importance of Indian IT industry in the far-eastern country, “it is the understanding in Board Rooms (of corporates) would hold the key in translating the realisation into business. It is a challenge. We are working towards it.”
Pact with Fujitsu Research
The association signed an agreement with Fujitsu Research Institute two years ago to enhance cooperation in the IT-BPM sector between India and Japan and increase awareness of companies from both sides on operating in other country.
“We stand a good chance as software-hardware differentiation is getting blurred. Japan being a leader in consumer electronics could do well in using the Indian strengths in software,” he said.
Other than Japan, the Nasscom is focussing on Korean, Australian, Thailand and Malaysian markets in the Asia-Pacific region to provide the IT industry a dependable market.
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