With the US market showing signs of saturation, India is keen to tap the vast business opportunities offered by Europe for the export of computer software and IT enabled services, the leader of an Indian industry delegation said here.
The 20-member delegation of chief executives and top-level managers of companies representing a cross-section of India's IT industry has been exploring new business partnerships in the Netherlands, Belgium and Germany and is currently visiting Brussels.
"The German market so far has been largely unexplored by Indian IT companies and they should make serious efforts to enter the market and to consolidate their existing presence because the business opportunities in this country are immense," said S R K Prasad, who led the delegation on a two-week tour said.
The time was very opportune for Indian IT companies to enter into outsourcing deals, joint ventures or other business tie-ups with German companies because they were showing a strong interest in cooperating with Indian companies in various sectors of the IT industry, Prasad, Managing Director of the Kasbah Systems Software in Coimbatore, told media.
The visit by the Indian IT delegation to Europe was organised by Electronics and Computer Software Export Promotion Council as a follow-up of India's successful marketing campaign at the world's largest computer and IT fair Cebit in Hannover in March.
The growing competition in the US market, continuing weakness of the US dollar and strong appreciation of the rupee were forcing Indfian IT companies to look for new markets for software products and IT services in Europe, Mangudi Subramaniam, Vice President of the Congruent Solutions in Chennai, said.
In Hamburg and Frankfurt, the delegation took part in business to business negotiations and buyer-seller meets hosted by the Indian Consulates there in cooperation with the ESC and visited some trade and investment promotion organisations.
As a result of their discussions, the Hamburg Business Development Corporation has shown interest to send a business delegation to India next year.
Germany is the third main market for India's computer software and IT enabled services in the European Union after Britain and the Netherlands.
India's exports to Germany went up by 45 per cent during the fiscal year 2006-2007 to $743.5 million from the level of $512.0 million in the previous year. However, the German market accounted for only about three per cent of India's global exports of software products and IT services.
Indian IT professionals' competence and their expertise in offering top quality software products and IT services covering the entire spectrum of IT industry are now widely recognised in Germany, Prasad said.
There is also a growing awareness among German companies that many sophisticated software systems and complex processes can be done in India not only at a much lower cost than in Germany, but also more efficiently.
Many German companies are also eager to regain the ground they lost to the Americans in the field of outsourcing software products and IT services in India.
Prasad said Germany offered excellent opportunities for joint ventures and other investments by Indian companies and the two countries could also collaborate in third country projects in Africa, Latin America, Eastern Europe and other regions.
Roderich Pilars de Pilar, an investment consultant in Cologne, said that the huge potential for expanding India's software and IT services exports to Germany was evident from the fact that so far India had only about four per cent share of Germany's annual spending of about $12 billion for offshore development of software products and IT services.
This was in sharp contrast to India's about 40 per cent share of US market for outsourcing IT products and services.
A large part of Germany's offshore IT projects are executed in Eastern Europe mainly because the companies there have the advantage of using German language for developing software and for communicating with their clients in Germany, Pilar said.
Subramaniam shared the view that the marketing potential in Germany for Indian IT companies was very large, but felt that language barrier was the biggest obstacle to enter the German market, especially to establish business relationships with small and medium-level companies.
But, this can be overcome by giving German language training for IT professionals at their production bases in India. His company has been doing this for some time and it yielded good results, Subramaniam said.
Rahul Sethi, CEO of the Integral Fusion e-Services in New Delhi, said his company has plans to open an office in Germany to tap the potential in the European markets.
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