Business: Exports; Missed Chance

India Today
November 9,1998

EXPORTS
Missed Chance

The Indian show at Milan fair was unimpressive.

By Shefali Rekhi

Missed Chance Indians are hardly known to make a mark in the competitive global arena. Last week's SMAU Information and Communications Technology Fair at Milan, Italy, was no different. Invited to the fair -- Europe's second largest in terms of visitors and volume of business transacted -- by the Indo-Italian Chamber of Commerce and even promised free space, the Indian delegation failed to make any noteworthy gains. Not only did it arrive late, it came ill-equipped and of course, with nothing significant to offer.

This, despite the fact that Europe is a thrust area for Indian software exporters, especially after the formation of the European Union. India's software exports to Europe have gone up from 5 per cent in 1992 to 23 per cent currently and by the year 2002, the information technology (IT) industry has set a target of achieving 30 per cent.

India's showing at the fair last year was no better. In fact, Indians were conspicuous by their absence. Though the organisers invited the National Association of Software and Service Companies (NASSCOM) -- an industry body which has led many official Indian delegations -- to the fair, it couldn't turn up. Says Dewang Mehta, executive director, NASSCOM: "We did not participate because the dates clashed with our annual general body meet and we did not wish to put up a poor show." The empty Indian pavilion on the fair grounds didn't send a very encouraging message.

This year, the Electronics and Computer Software Promotion Council (ECs), a Commerce Ministry-sponsored body, was invited. But the experience hasn't been very rewarding this time either. ECs accepted the invitation because its delegation was already going to Munich for the Systems '98 fair. With one fair following the other closely -- the Munich fair closed on October 23, while SMAU began a day before -- the participants, mainly medium and small companies, lacked infrastructure for both the exhibitions.

The result: the India pavilion was bare on day one, boasted of less than half the total strength the next day and was totally geared only a day before the fair ended. The Indian displays too were no match for those of other countries. And with reputable Indian names not part of the official delegation (some did put up stalls independently), it's not surprising business inquiries were lukewarm. Says D.P. Gupta, chief (coordination) with ECs: "Maybe, if we had arrived earlier, the response would have been better. But we are satisfied with what we got." That attitude is unlikely to take the domestic industry far.

The hosts too are disappointed at India's response. "India stands to lose. Even China came to our fair with an 18-member delegation," says Antonio Follador, vice-president, SMAU. Trade fair enthusiasts say you need delegation strengths of 15-20 with a range of large, medium- and small-scale players and a lot of gimmicks to attract attention at these fairs. Then there's the issue of what India has to offer. Going by global standards, not much. India has a strong foothold only in the customised single-client package market, which is a mere 20 per cent of the global market. The rest is innovative multi-client product-and-packages market, where both risks and profitability are higher. But India's share in this segment is a mere 0.01 per cent.

Years of neglect have held back growth. it industry has got a boost only now with the BJP Government getting a task force to draft an it Action Plan. To be in the product-and-packages segment, companies also need to invest heavily in marketing and promotions. But till recently, this was controlled by the RBI, which imposed tough export obligations. That stifling of the growth potential is having a telling impact now. A push in time would have meant a better share for software exports in India's total export basket and a better fare on the overall export front this year. But is anyone listening?

Issue Contents | Write to us | Subscriptions | Syndication