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December 12, 1997


The Berlin Wall

Germany's tough immigration laws are robbing Indian companies
of big bucks in the Y2K and Euro-conversion businesses.

Indian information technology industry is in danger of missing the multi-billion dollar millennium bug and the Euro-conversion businesses in Germany.

German immigration laws, IT professionals say, is biased against Indian software engineers and this is reflected in the negligible size of the software business between the countries.

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According to Rohan W Joshi, head, corporate marketing, Infosys, Germany has been discriminating against South Asian IT professionals who plan to set up onsite facilities in that country. "It is a clear non-tariff barrier and is hurting plans of Indian companies," Joshi alleges.

Ironically, a Frankfurt business delegation was on a visit to Bangalore last month. Its mission was to attract Indian IT companies to put up offices in Frankfurt, the business capital of Germany.

Dr Hartmut Schwesinger, chief executive of the 65,000-member Business and Economic Development Corporation, Frankfurt, was unaware of the discrepancy in the immigration laws.

He, however, promised to persuade the Frankfurt city mayor to take up the issue with the federal government. He confirmed that the inflow of refugees from the Slav countries and pressure to find jobs for the former East Germans is hurting the free flow of software professionals from developing countries.

Joshi, who was looking after Infosys' European operations for four years, believes the barrier, if not removed, will hurt Indian companies which are banking on the millennium bug and Euro conversion as a major business driver in the next five years.

"The world-wide year 2000 bug, also referred to as the Y2K or the millennium bug and the Euro currency conversion by 2002 are worth $600 billion each. Germany is a big market. It is around 25 to 30 per cent of the total European market. This can slip out of our hands if something is not done on the immigration front,'' Joshi feared.

Yet, most of the top Indian software houses like Tata Consultancy Services, HCL and Wipro Infotech have specific plans to target the European and, particularly, the German market. Many of them are getting set to compete in the global bids for Euro conversion expected to be floated shortly.

Schwesinger said small and medium size companies, which need onsite presence of solution providers, dominate the German industry. "For big German companies offshore development of software from Bangalore is not a problem but for the small and medium size companies, physical presence is a must, especially because of the difference in language,'' he said.

"Though German language is one of the problems, most Indian companies are able to manage that,'' Joshi claimed.

Package software, growing at 25 per cent a year in Germany, has a major potential for Indian software companies. Contract programming, systems networking and education and training software are other opportunity areas.

The Euro currency conversion business, Joshi said, is just one aspect of the European Monetary Union. The Gartner group, an US-based market research outfit estimates Euro conversion business to be as large as that of Y2K.

"Euro currency will change the whole face of business in Europe. It will encompass settlement systems and a reconfiguration of the large retail outlet business in Europe. The Euro issue is being seen largely as an European problem and has not attracted attention, as it should. The Euro conversion is also expected to result in large-scale mergers and acquisitions in Europe.''

Unlike Y2K, which is largely people centric, the Euro currency business is a process issue. This requires a higher level of capability, Joshi explained.

- Compiled from the Indian media

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