Japan’s $200-billion IT services market is now offering renewed hope to Indian companies as the country tries to jumpstart its economy and as more Japanese firms look to expand globally,
report Debojyoti Ghosh & Ajay Sukumaran in Bangalore. The road to recovery — coming after the 2011 tsunami crisis, which crippled the country — could see an increase in IT spend, including outbound investments where Indian firms stand a good chance because of their global presence, say experts.
Japan is the second-largest IT services market after the US, but top Indian IT exporters earn less than 2% of their revenues from there, thanks to an insular market structure dominated by domestic conglomerates and cultural and language hurdles. Now, when Japan has embarked on a ‘three-arrowed economic booster plan’ to kick-start growth and drive investment, many Indian IT firms also seem to be on a better footing, having expanded their presence with local partnerships after more than a decade of setting up operations there.
While both the outsourcing and offshoring model are gaining momentum, Japanese companies have also been leveraging the IT industry in India with the likes of NTT, Hitachi and NEC having acquired local IT firms. Around 900 Japanese firms have operations in India now.