India seeks IT partnership with China for 'strategic gain'
SHANGHAI: Addressing a full house of Indian and Chinese businessmen at the Shanghai International Convention Center in the showpiece business district of Pudong, the locomotive of economic boom of China's largest city dotted by futuristic glass-and-chrome skyscrapers, Vajpayee said there was a "potential strategic gain from an India-China partnership in IT".
"In combination, rather than in competition, Indian and Chinese industries can be a potent force. This is a principle which has far wider application in South-South cooperation," he told a seminar on "India and China: Challenges and Opportunities in the IT Sector".
"It is self-evident that our respective core competence in hardware and software provides a natural ground for an effective alliance in the IT industry," said the prime minister, whose path-breaking six-day visit to China ends Friday.
"The profiles of our respective software industries are also complementary. While in China the predominant focus is on products, the Indian software industry focuses more on contract services and solutions."
It wasn't long ago really when India's high-profile IT industry's fear of China emerging as a potential competitor in the technology space bordered on full-blown paranoia.
But with Indian software majors finally realising that they can't fight shy of China forever, they are fast shedding their fears and inhibitions and China is taking a prominent place in their future global plans.
Currently, IT software and service exports from India to China is to the tune of 200 million, or a meagre 0.05 percent of India's total software exports in 2001-02.
At present China outstrips India in almost every sphere of business except software. China attracts the biggest chunk of foreign investment in Asia and its share of world exports is far larger than neighbouring India's.
In IT, however, India takes pride in outdoing its neighbour. No major Chinese software companies are globally as reputed as India's Infosys Technologies and Satyam Computer Services.
Analysts say China, with software exports worth $1 billion, may not be a threat in the short term to the Indian software industry, which managed to earn $9.5 billion last year. But studies indicate that China may catch up by 2008.
The opportunity for Indian companies is to use the Chinese base now to remain ahead, they say.
Vajpayee said the strong international brand recognition of Indian IT firms was an asset that could enrich an India-China IT partnership.
"The higher end of the value chain is a niche that even multinational firms have not explored in the Chinese market," he added.
Lauding the rapid achievements China has made in the technology sector, Vajpayee said Indian companies have much to learn from their Chinese counterparts in the field of hardware and communications infrastructure.
He said it was a matter of pride that the world's two most populous countries were counted among the leaders in the cutting-edge technologies that drives knowledge economy.
"In recent years, Indian business and industry have been strongly exploring the synergies with China in the knowledge-based technologies," he said, adding an awareness gap between the industries has inhibited a more vigorous interaction.
"If countries like India and China were to concentrate on specific areas of their technological advantage, they could benefit far more than by competing across the spectrum."
The prime minister called upon Indian and Chinese IT industries to join hands to provide state-of-the-art solutions for the Olympics due in Beijing in 2008.
"The Olympic Games could provide a good opportunity for Indian and Chinese IT firms to work together. Our experience has shown that in mega events like these, a substantial proportion of the contracts awarded in the IT sector are actually sub-contracted to Indian firms by contractors from the developed countries."
Indian and Chinese firms could instead join up to provide state-of-the art solutions at cost effective prices, thereby also cutting out the middlemen, he added.
Sino-Indian cooperation was also underlined by Indian IT and Communications Minister Arun Shourie who said the two countries should transform any perception of rivalry between them into friendship to make the "Asian century" a reality.
"Both countries need to put value to that relationship, transcending the calculus of immediate advantage of trying to put down the other," he told a gathering of Indian and Chinese business leaders.
Vajpayee arrived in Beijing Sunday for the first visit to China by an Indian prime minister since 1993. Chinese newspapers have hailed him as a man of peace for his determination to make friends in the region.
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