Indian IT companies are looking upon Japan as their next possible market to expand, keeping in view the financial meltdown prevailing in the traditional markets like the USA and UK.
According to the IT software and services industry body NASSCOM, as the ongoing economic crunch has badly affected most of the industry segments, the Indian IT sector may also see a lethargic growth but would bounce back, as per the news published by thestatesman.
The Indian IT sector has shown 30% growth in past years and is expected to grow 21-24% in 2008. Japan, the second largest economy of the world, is expected to be the next potential market for the Indian IT industry. Presently, Japan comprises of just 2% of IT exports from India, totaling $1-1.50 Billion while the total IT services market of Japan stands at $108.6 Billion.
The major reason why India is building hopes on Japan is the ongoing financial meltdown in the US that has forced the Indian IT companies to look beyond the traditional markets like the USA and the UK. Thus, they are looking upon Japan as a potential market for their products and services. Also, the companies are now acknowledging the fact that this is the appropriate time to expand globally and technically.
Further, the present crisis has put pressure on the Indian IT companies to slowdown their decision-making processes and plan their expenditure cautiously. It might affect the IT sector of India after a few quarters but Indian IT companies are positive about their future and are still hiring. Also, this is the high time for the Indian companies to explore for companies globally because of their lower valuations and depreciation in Indian rupee.
However, Japan would not be able to offer an instantaneous solution to the economic crunch prevailing in the West and its impact on the IT service industry of India. But, from the long-term investment point of view, Japan seems to be a perfect destination, which will certainly prove fruitful in future.
According to the Research Analyst at RNCOS, “Evidently, the Indian IT industry is experiencing heat of the US economic volatility. So they are required to bring a change in their approach and should try to be transformational, instead of transactional. Moreover, Indian IT companies should be prepared to make investments in strong relationships, as markets like Japan are perceived to be relationship-centered.”
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