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Presentation by:- Dewang Mehta President NASSCOM Non-Tariff Trade Barriers in I.T Trade Experience of India www.nasscom.org WTO Information Technology.

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Presentation on theme: "Presentation by:- Dewang Mehta President NASSCOM Non-Tariff Trade Barriers in I.T Trade Experience of India www.nasscom.org WTO Information Technology."— Presentation transcript:

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2 Presentation by:- Dewang Mehta President NASSCOM Non-Tariff Trade Barriers in I.T Trade Experience of India WTO Information Technology Symposium 16 July 1999 Geneva

3 NASSCOM WTO

4 NASSCOM WTO

5 NASSCOM National Association of Software and Service Companies NASSCOM WTO

6 NASSCOM THE ONE STOP REFERENCE ON SOFTWARE INDUSTRY IN INDIA NASSCOM WTO

7 NASSCOM Not-for-Profit Association To Act as a catalyst for the growth of software driven - IT industry in India NASSCOM WTO

8 NASSCOM Membership Home-Grown Companies Multinationals IT Software & Services Company NASSCOM WTO

9 NASSCOM WTO

10 Indian Software Industry NASSCOM WTO

11 What is Common ? NASSCOM WTO

12 NASSCOM WTO

13 SOFTWARE INDUSTRY IN INDIA , , , , , Projections US$ Million Rs. Million NASSCOM WTO

14 SOFTWARE EXPORT INDUSTRY ,085 39,000 1,750 65,300 2, ,400 3, , Projections US$ Million Rs. Million NASSCOM WTO

15 INDIAN SOFTWARE EXPORTS DESTINATIONS ( ) North America 61% Australia & New Zealand 2% EUROPE 23% WEST ASIA 1.5% JAPAN 4% SOUTH EAST ASIA 4% REST OF THE WORLD 4.5% NASSCOM WTO

16 DOMESTIC SOFTWARE MARKET US$ MILLION Rs. Million 16, , , ,200 49, Projections 1,725 73,000 NASSCOM WTO

17 THE INDIAN SOFTWARE COMPETITIVE ADVANTAGES COST EFFECTIVE - HIGH QUALITY MATHEMATICAL & LOGIC EXPERTISE 2nd LARGEST ENGLISH - SPEAKING SCIENTIFIC MANPOWER RESERVOIR IN THE WORLD HIGH SPEED (SATELLITE) DATACOMMUNICATION AND VALUE ADDED SERVICES FOR SOFTWARE DEVELOPMENT (64 KBPS, 2MBPS AND ABOVE) NASSCOM WTO

18 OFFSHORE SOFTWARE DEVELOPMENT USA UK INDIA JAPAN SINGAPORE NASSCOM WTO

19 Mode of Delivery Off-Shore Development (Through high-speed Datacom Satellite Links) On-Site Services (Through movement of Natural Persons) Physical Deliveries (Through packages on floppies, CDs etc.) Indian Software Exports NASSCOM WTO

20 Zero Duty on import of Software India is signatory to ITA Zero Duty on all I.T. Product by 2003 Imports of I.T. into India NASSCOM WTO

21 THE INDIAN SOFTWARE ABILITY TO HANDLE LARGE PROJECTS HIGH GROWTH IN EXPORT AND DOMESTIC MARKET NO IMPORT DUTIES ON SOFTWARE TOUGH IPR LAWS USE OF STATE-OF -THE- ART TECHNOLOGIES VIRTUAL SOFTWARE ORGANISATIONS (SOFTWARE FACTORIES) NASSCOM WTO

22 COST & QUALITY ADVANTAGES HIGH COSTCOST COSTCOST LOW QUALITY HIGH CURRENT POSITION INDIA IRELAND IRELAND ISRAEL ISRAEL SINGAPORE SINGAPORE PHILIPPINES PHILIPPINES HUNGARY HUNGARY CHINA (PRC) CHINA (PRC) NASSCOM WTO

23 INDIA IS BEST POSITIONED FOR CROSS BORDER IT SERVICES Vendor Sophistication People Sophistication China CIS Mexico India The Philippines Source: McKinsey Analysis Low High

24 INDIA HAS A NUMBER OF SOPHISTICATED VENDORS As of March 1999 Top 300 Companies Certified Companies in India NASSCOM WTO

25 Issues in I.T. Trade Movement of Natural Persons Wage Parity Insisted upon Universal Recognition of Qualifications Double taxation of Social Security Deduction of Withholding Tax Intellectual Property Rights E-Commerce NASSCOM WTO

26 I.T. Trade with USA India Exported I.T. Software and Services worth US$ 1.7 Billion to U.S.A during (Total Indian Software Export was worth US$ 2.65 billion) India Imported I.T. Products from U.S.A worth US$ 2.5 Billion during NASSCOM WTO

27 Problems in I.T Trade with USA H-1B Visa Global cap not sufficient Wage parity insisted upon by U.S.A (Discriminating) Double taxation of Social Security (no benefits to Indian Employees) Discriminating Labour Laws Non-Tariff Trade Barriers NASSCOM WTO

28 I.T. Trade with USA Situations has improved since 1993 Suggestions for further improvement More H-1B Visas required Transparency in Visa Program Totalisation Agreement to be signed Amendment to labour Laws in U.S.A No insistence of wage parity NASSCOM WTO

29 I.T. Trade with Europe India Exported I.T. Software and Services worth US$ 580 Million to Europe during (Total Indian Software Export was worth US$ 2.65 billion) India Imported I.T. Products from Europe worth US$ 900 Million during NASSCOM WTO

30 Problems in I.T Trade with Europe No Transparency in Visa Program Movement of Natural Person restricted Double taxation of Social Security Opening of office is a problem Delay in Work Permits NASSCOM WTO

31 I.T. Trade with Europe More transparency required in Visas and Work Permit Movement of Natural Person (for trade) should be treated separately from normal Immigration rules No insistent of Wage Parity in some countries Universal recognition of qualifications NASSCOM WTO

32 I.T. Trade with Japan India Exported I.T. Software and Services worth US$ 100 Million to Japan during (Total Indian Software Export was worth US$ 2.65 billion) India Imported I.T. Products from Japan worth US$ 500 Million during NASSCOM WTO

33 Problems in I.T. Trade with Japan Work Permits Witholding Tax NASSCOM WTO

34 Removal of Non-Tariff Trade Barriers in I.T. Trade should be part of ITA - II NASSCOM WTO

35 Government of India Policies are IT friendly Income Tax exemption for Software and Services Export Zero duty on Import of Software Special Scheme - Software Technology Parks (STP) IT on National Agenda State Government I.T. Policies NASSCOM WTO

36 PROJECTIONS INDIAN SOFTWARE INDUSTRY Domestic Export Total In US$ Billion NASSCOM WTO

37 NASSCOM WTO

38 For more details on me

39 Thank You


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