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IT sector to grow by 25-26% annually: Narayana Murthy
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| 05. TECHNOLOGY |
| IT sector to grow by 25-26% annually: Narayana Murthy |
| Economin Times, 24 JAN, 2011 |
Picking up after being adversely hit by the global slowdown, India's IT sector is performing well and would experience an annual growth of 25-26 percent, Infosys Technologies founder-chairman N R Narayana Murthy said. "Under the current circumstances, it is performing well," Narayana Murthy told mediapersons on the sidelines of a function here.
"Overall, things are fine. Our annualised growth will be 25-26 percent, and that is pretty good," he said. "The sector draws a revenue of $5 billion, and if we can grow at 25 percent, that's not bad," he said. Asked for his reaction on US President Barack Obama's remark "Say no to Bangalore and yes to Buffalo", Murthy said the comments were symbolic of the foreign community's growing respect for Indian industry. "When the US president talks about Bangalore, that means there is certain respect," he said.
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| ATIRA to unveil Asia's first geotextiles lab by March |
| Business Standard: January 24, 2011 |
Ahmedabad: On its way to become a major centre of excellence in technical textiles, the Ahmedabad Textile Industry's Research Association (ATIRA) is set to unveil Asia's first testing and certification laboratory in geotextiles at its campus in Ahmedabad. Being set up in association with German lab, Geoscope.
"The equipment have already started coming in and we are in the process of installing them. By March, we should have Asia's first geotextiles testing and standardisation laboratory ready in our campus. On its part, Geoscope will supply technical experts and special equipment and will also provide training," said AK Sharma, director, ATIRA. The laboratory is being set up as part of a Centre of Excellence (CoE) in technical textiles products at ATIRA.According to Sharma, the CoE is being set up at a project cost of Rs 250 crore, which will include facilities in verticals other than geotextiles as well.
For instance, the institute has signed memorandums of understanding (MoUs) with the likes of Karl Sruhe Institute of Technology, Germany, Bremen University of Germany, and National Composite Centre, University of Manchester, United Kingdom.The MoU with Karl Sruhe Institute of Technology, Germany encompasses development of new technologies in composites, while that with Bremen University of Germany is for providing training programmes and certificate courses in composite.
"Yet again, this will be for the first time that training programmes and certificate courses will be conducted in composites, and we will be doing that in Ahmedabad alongwith Bremen University of Germany. In principal, the Government of India has agreed to support us on this and we should be starting these programmes by March or April 2011," said Sharma.Similar to the testing lab for geotextiles, ATIRA located in Ahmedabad will also set up a testing, standardisation and R&D centre at its campus with the help of National Composite Centre, University of Manchester, United Kingdom.
"There are not much research or testing conducted in composites, which is a vast area in technical textiles. With this centre, we hope to provide the vertical a much needed fillip in the country," Sharma added.Meanwhile, working towards to enhancement of the composites vertical in technical textiles, ATIRA has also signed an MoU with the Government of Gujarat to set up altogether a CoE in composites. The institute expects the work on the CoE to begin soon within this year.
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| Govt set to re-start textile upgradation fund scheme |
| The Hindu Business Line: January 21, 2011 |
New Delhi: In what could come as a leg-up for the textiles sector, the Centre is set to re-start its popular Technology Upgradation Fund Scheme (TUFS).
The Union Cabinet is expected to give its approval to revive the scheme, which is likely to be re-started by the month-end, Ms Rita Menon, Secretary, Ministry of Textiles, said here while inaugurating a stakeholder consultation meeting on technical textiles, organised by Federation of Indian Chambers of Commerce and Industry and the Ministry of Textiles.The Union Budget for 2010-11 had provided for an allocation of Rs 2267.50 crore, of which around Rs 1,500 crore was sanctioned in the first quarter of the fiscal. In June last year, the Government had abruptly asked banks to suspend new sanctions under the scheme, till such time the new fund allocation was approved by the Cabinet Committee on Economic Affairs (CCEA).
“An in-principle approval to re-start sanctions under TUFS has been granted by the Finance Ministry. The decision needs to be ratified by the CCEA, which is likely to do it next week,” an official involved in the exercise said.The scheme provides for reimbursement of 5 per cent out of interest actually charged by lending agencies for facilitating investment in the modernisation of textiles and jute units and is operated through nodal agencies such as IDBI, Small Industries Development Bank of India, IFCI and major nationalised banks.
The Ministry had introduced the scheme in 1999 to boost investment in the textiles sector. TUFS was to last till 2007, but the Government had extended the scheme till 2012 in view of its popularity. The domestic textiles industry had been pressing for the continuation and upgradation of the scheme, citing the need to constantly modernise plant and machinery to compete with China, Vietnam and Bangladesh. During 2008-09 and 2009-10, Rs 2,631.38 crore and Rs 2,890 crore was released respectively under the scheme.
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| Japanese cos are eyeing Indian IT for acquisition |
| Economic Times, 27 JAN, 2011 |
Japanese IT companies are aggressively looking at technology companies in India to acquire. Three Japanese IT majors, Fujitsu, NTT Data and Hitachi Consulting, were amongst the early bidders to acquire Patni Computers, though all of them eventually backed off.
But they have been successful in some others. NTT Data acquired US-based IT services firms Keane International and the US-based Intelligroup in 2010, and Hitachi Consulting acquired another US IT company called Sierra Atlantic in January 2011. Over three-fourths of employees in these companies are based in India.“In the next 18 months we could expect a lot more action from Japanese companies,” said Partha Iyengar, V-P at research firm Gartner. According to IT industry body Nasscom , the Japanese IT services market, pegged at $108 billion, is the world's second largest after the US.
A shortage of skilled manpower and increasing cost pressures are driving the Japanese IT majors to explore cheaper offshore buys in India. The demand for IT services in Japan is driven by the banking, financial services and insurance (BFSI) and manufacturing industries, which together account for over 40% of the IT services market. Local companies like Fujitsu, Toshiba , NEC and NTT Data and US-headquartered IBM are the top players in Japan. According to Raja Lahiri, director - transaction services at KPMG India , Japanese companies are looking at acquiring mid to large sized IT services companies in India. “It makes sense to have a presence in India to service global clients, as also the large Japanese market. With an ageing population they lack the manpower skills that India can offer,” he said.
Most Japanese enterprises continue to operate the legacy mainframe and more than 53% of Japanese IT services constitute customized software development. These applications, developed using IBM family architecture, require extensive manpower skills.Japanese firms are beginning to migrate their applications in view of the high maintenance cost, low flexibility and non-availability of legacy skills. As Japanese vendors who developed these systems will get biggest pie of migration opportunity, it makes sense to have centres in nations like India to gain scale and cut costs.
There's also another reason why the Japanese are interested in Indian IT. As Sameer Dhanrajani, country head of Fidelity National Financial India, points out, Japanese companies have been primarily servicing the APAC, China and South Korean regions due to cultural affinity.They miss out on large opportunities in the more lucrative European and US markets. India has a first mover advantage in capturing the US and European offshoring markets. Thus acquiring Indian companies with blue-chip clients is an attractive option.
“However they now realize that as countries like China and India threaten to eat into their own client base at home as well as globally, not having an offshore presence in India puts them at a disadvantage,” Gartner's Iyengar added.Fujitsu president Masami Yamamoto recently said that the company intends to increase its focus on IT services through acquisitions of software firms particularly in the area of cloud computing.A paper titled The competitiveness of Japan's software industry' by Tatsuo Tanaka , a faculty fellow at the Research Institute of Economy, Trade and Industry (RIETI) in Japan, indicates that Japan excels in producing custom and embedded software, but lags when dealing with packaged business and online software. Custom software is said to be inefficient in terms of cost and quality because it can't derive economies of scale and compete globally against packaged business and online software.
Fidelity's Dhanrajani added that Japanese companies are involved in high-end software development, engineering and R&D work. They do not have the IT services capabilities at the lower end of the value chain, which constitutes the mass segment of IT services demand. “To offer services across the value chain it becomes essential for them to make acquisitions in India,” said Dhanrajani
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