India to gain from China-Japan spat

By siliconindia staff writer   |   Friday, 27 May 2005, 07:00 Hrs
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BANGALORE: International IT research firm Gartner has said that India stands to benefit from the recent spat between China and Japan.

In a new report, Gartner said should the China-Japan spat continue, Japanese companies might consider India as a low-cost destination and transfer high technology works to India from China which does a bulk of manufacturing for the Chinese companies.

Indian enterprises should look to take advantage of opportunities that the situation presents, the report said. “Most large global companies will have to adjust their strategies and plans if the China-Japan situation remains volatile. For many companies, it is no longer ‘business as usual’ in northeast Asia,” Dion Wiggins, Vice-President and Research Director of Gartner said.

According to the report, if the tension between the two largest Asian economies were to escalate, the impact may spread to Hong Kong and Korea; both of who have seen Japanese extremities during World War II. In this extreme scenario, Japanese technology firms may reduce their commitment to the Chinese market with many ultimately withdrawing completely, and India would become Japan’s new base for low-cost manufacturing, the report said.

However the report has also advised, Indian enterprises to develop contingency plan for reducing dependency on products and services from northeast Asia.

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