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November 4, 1997


Govt may set up software export think tank

The government will soon provide some major policy initiatives to boost exports of software products and packages which have a $250-billion global market.

The proposals to boost this sector include encouraging aggressive venture capital financing to companies and changing some of the policies and procedures to accommodate employee stock ownership in these companies.

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Products and packages, at present, constitute just about 10 per cent of the $1-billion software exports from India.

The government may also set up a think tank comprising industry experts, R&D organisations and academic institutions, marketing and business institutions and policy-making bodies - to provide ideas to boost the sector.

The proposal for new policy initiatives follows the observations of the committee of secretaries that India's capabilities, at present, are limited to provision of onsite services or offshore development of software.

The committee of secretaries, headed by Cabinet Secretary T S R Subramanium, at a recent meeting observed that India has made no dent in the international arena in this product category in the way it has done in the area of project services.

Following this, the government asked the industry to prepare proposals which can be taken up for developing the sector.

The Electronics and Computer Software Export Promotion Council, which has sent its proposal to the government, feels that the cutting edge for promoting the products and packages sector will have to be skilled manpower.

The council feels there must be a concerted effort to reduce sufficient number of high-level computer experts.

ESC Executive Director R H Naqvi has said that in the initial years, strategies adopted by Indian software companies to take up onsite jobs served the immediate interest of the industry for quality, international recognition and foreign exchange earnings.

The percentage of onsite jobs, which used to be around 90 per cent a few years ago, has come down to 55 per cent, but still India is considered a manpower supplier rather than a supplier of software packages.

And this, Naqvi feels, could be turned to India's advantage when trying to make a dent in software products and packages sector.

Naqvi says if India does not hurry up then the competitive advantage enjoyed in this line of business could be eroded by countries such as China, Indonesia, the Philippines, Mexico and Russia.

The think tank that has been proposed, Naqvi says, should hold extensive market research data, including forecast, exploration results and business profiles and trends and expert opinion from industrial sectors regarding computer-based total solution for specific sectors.

Naqvi also suggested the setting up of a strong marketing and business development agency like the ESC allied with the nodal group.

- Compiled from the Indian media

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