India releases strategy paper on computer software and electronics exports

ESC prepares strategy paper for augmenting software exports to $178 billion by 2022; the scope of exports of Electronics & IT Products to the Middle East countries are unlimited due to its strategical location, says Kamal Vachani

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Kamal Vachani, Prasad Garapati, Navdeep Singh Suri, Mrs Mani Suri and D.K. Sareen at the Gitex Technology Week in Dubai in 2017. - File photo

Staff Report

Suresh Prabhu, Union Commerce and Industry Minister, Government of India released a strategy paper prepared by Electronics and Computer Software Export Promotion Council (ESC), sponsored by Government of India on “Augmenting India’s Software, ITeS and Electronics Exports”, informed Kamal Vachani, Hon. Regional Director of ESC for the Middle East.

“It is extremely important to accelerate the growth momentum in computer software, ITeS and electronics sectors to augment India’s exports. The Government will extend all possible support to the industry for intensifying the exports to traditional markets and to make forays into the alternate markets like Africa, Latin America, CIS etc. We are taking proactive steps for making ICT exports more vibrant and to motivate more units to focus on exports. I compliment ESC for taking this initiative and hope that other export promotion councils take necessary steps to augment exports from their respective verticals,” says Prabhu.

Explaining the focus of the Electronics and Computer Software Export Promotion Council (ESC) strategy paper, Chairman of Software Committee of ESC said that the strategy paper is crystallisation of ideas that have emerged at several rounds of talks which ESC has held with ICT exporters, experts and other stakeholders. “While evolving a perspective plan for sustained exports from software sector, which has transformed the Indian ICT sector, our focus is on the SME sector. The contribution of over 5000 units in the sector to the software exports is only US$ 13 billion in the total exports of US$111 billion total software exports from the country. Our strategy paper suggests an enabling framework for doubling the contribution of this sector to US 26 billion in the next few years.

According to Mandeep Puri, Chairman, Electronics and Computer Software Export Promotion Council (ESC), the ESC strategy paper scans the past and present trends in the IT sector in India and evolves a plan of action for the future to continue with India’s head start to reach higher an export target of US$178 billion by 2021-22.
The paper spells out specific policy prescriptions, market destinations and other enabling inputs that can bring about transformational changes in the Indian software and services exports. Specific suggestions include judiciously blending software and hardware, creating newer export outlets, fiscal incentives, country specific software export promotion measures for destinations like Germany, France, Japan, China, Latin America, Africa etc.
This year Electronics and Computer Software Export Promotion Council is focusing on the entire Middle East region in particular the UAE and Dubai would continue to be markets of strong interest. The scope of exports of Electronics & IT Products to the Middle East countries are unlimited due to its strategical location, informed Kamal Vachani. The Middle East market represents a massive potential to be tapped. There has been a phenomenal rise in IT exports from India to Middle East countries. The regional representation of ESC has been instrumental in promoting export to the Gulf and Middle East Region since its inception in 1999 and exports to the UAE/Middle East have grown multifold, added Kamal Vachani. Vachani is confident that efforts being taken by ESC for promoting exports to the Middle East will definitely bring fruitful results.

The ESC paper also highlights the need for some policy level changes that are critically needed, such as resolving visa problems with the US, greater access of professionals to European countries, early signing of Totalisation Agreement with the US, setting up of incubation centres and language proficiency facilities in major IT hubs. The current business model for export of software and ITeS is relevant for outsourcing work. For the emerging markets like Africa and Middle East a different model, is required since India mostly offers product solutions. Although potential for export of software & ITeS in US and Europe is high, the smaller companies are grossly underperforming because of innovation and technology leadership gaps.

Regarding hardware and electronics sector, DK Sareen, Executive Director, Electronics and Computer Software Export Promotion Council said that India’s electronics production in 2016-17 was estimated at about US$ 40 Billion. Over 60 per cent of the demand is met through imports. At the current rate of growth, the domestic production can cater to a demand of US$ 75-100 billion in 2020 as against the projected demand of US$ 400 billion, the rest would have to be met by imports. “This aggregates to a demand supply gap of nearly US$ 300 billion by 2020. India’s export performance in electronic hardware has so far been wanting. Strategically it is extremely important for us to be able to scale up the current US$6 billion exports to US$20 billion in the next five years,” says the ESC paper.
He further said that the opportunity areas of export in electronics hardware identified in the study includes items such as electronics energy meters, IOT’s in the energy efficiency area and electronics components, sub-contracting and Electronics Manufacturing Services.