Shourie woos Japan for hardware investments

NEW DELHI: Union Minister for Disinvestment, Telecommunications and IT Arun Shourie invited Japanese companies to re-locate hardware facilities to India. He said this in a televised address at the India IT seminar organized by CII and JETRO in Tokyo today to coincide with the 100th anniversary of India-Japan association.

Shourie said that while India's progress in software has been well recognized there is a huge opportunity for Japanese companies to look at relocating hardware manufacturing facilities to India. He mentioned that the recent Union budget had many incentives for companies considering such re-location. He pledged the full support of the Government of India.

Commenting on the India's IT exports to Japan, Shourie said that there is a tremendous scope for this to grow from the current 3 percent. He said that to realize the potential of Indian IT industry in Japan both Governments would have to work together to removing impediments hampering growth. He added "Imposition by Japan of 20 percent withholding tax on software export from India, presumably as a result of interpretation by Japan of such exports as service exports, is one such area needing attention".

He further said, "This tax has been hurting not only Indian exporters but Japanese importers as well. While it adversely affects competition for Indian software exports, it also hurts the Japanese importers by way of increased costs. There are many suggestions towards resolving the issue, including interpretation of the tax rules in line with international practice and treat software exports as products rather than services exports." Shourie said that if the issue is resolved, it would boost the prospects of expansion of the existing co-operation in this vital field.

Strongly pushing the case for increased IT investment in India, Shourie said that India continues to be a compelling investment destination. The minister also highlighted the liberalization and progress made in the telecommunication sector in India, he said that the sector crossed $ nine billion in 2002. He pointed out that the telecom tariffs in India are amongst the lowest in the world.

The other speakers in the seminar included JIBCC Chairman N Kawamoto, JETRO Executive VP Iizuka, and Ambassador of India to Japan Aftab Seth.

(CNS)