TCS, Infosys, Wipro, HCL flag market access woes in China
Top information technology companies such as TCS, Wipro, Infosys, Tech Mahindra and HCL have told the government that China remains a difficult market to do business in, despite the fact that they have been present in the world’s third-largest IT services market for over a decade now.
In a meeting with commerce and industry minister Piyush Goyal late on Wednesday, the top executives of these companies said market access in China is a nagging issue, thanks to various non-tariff barriers employed by Beijing. This is despite the fact that they are employing 90% of local people in their China operations. Returns still remain low and, therefore, prospects of growing business there are very limited.
Goyal had convened the meeting to discuss opportunities for the companies to invest and grow their business in new markets like the Nordic countries, Eastern and Central Europe, Canada, Australia and Africa. They have also been asked to explore avenues for greater investments and growth in East Asian markets like China, Japan and Korea, according to an official statement.
Diversification of India’s IT industry to new geographies has been a critical issue for the government, given the potential of trade tussle with the biggest market, the US, due to unpredictable visa and other policies of the Trump administration. Currently, the US alone accounts for around two-thirds of India’s IT services exports.
The IT industry, which had contributed 7.7% to GDP in FY17, is expected to account for 10% of it by 2025. India’s IT and IT-enabled services industry grew to $181 billion in 2018-19 — exports made up for $137 billion while domestic revenues (including hardware) stood at $44 billion.
Goyal asked IT industry body Nasscom to share specific data regarding non-tariff barriers being faced by the companies in China and other East Asian markets. The government will give all support for the global growth of India’s flagship industry and will “make all efforts to facilitate the IT service industry and for that it is ready to engage with China and also Japan and Korea”, Goyal said.