Speech by Mr. R. K. Bhatia, High Commissioner of India to South Africa at the seminar entitled ‘India @ Futurex’ (Johannesburg: May 17, 2007) His Excellency Mr. Radhakrishna Padayachie, Deputy Minister of Communications, Ms. Moira de Roche, President, Computer Society of South Africa (CSSA) Mr. Keith Anderson, President of IT Association of South Africa Mr. Sanjiv Narayan, Chairman, Electronics and Software Council(ESC) Shri Raman Dhawan, President, India Business Forum Distinguished Guests, Ladies and Gentlemen, It gives me immense pleasure to address this distinguished gathering of IT entrepreneurs and professionals, captains of business and industry from other sectors, senior officials, media representatives and other guests. I am particularly happy to welcome CEOs and other senior representatives of a total of thirty Indian IT companies amidst us today. 2. BDiplomats are partisan to the art of understatement, but let me emphasise that India’s participation as “the partner country” in Futurex, 2007 is a first event of its kind, arranged by India Inc. with the assistance of the Government of India in order to showcase the country’s IT assets in South Africa and the region. Although historic in nature, it is but the first serious step in deepening mutual awareness and in creating serious business contacts. We hope that this will lead to sizeable business transactions in a mutually beneficial manner in due course. 3. When I presented my credentials to President Thabo Mbeki on March 8 this year, he spoke eloquently of close and strong political relations between India and South Africa. He gave us encouragement for strengthening the economic dimension of this relationship. In particular, he pointed in the direction of augmenting linkages between IT companies of India and South Africa. Our participation in Futurex on a large scale this year is in fulfillment of our assurance to the President. 4. The story of success of Indian economy since 1991 is now familiar not only to knowledgeable people but even to a casual reader of media publications around the world. India has undergone a paradigm shift due to its competitive edge in the world economy. In terms of size, the economy has just crossed dollars one trillion mark. In terms of growth rate, this economy has now proved to be the fastest growing economy among all the democracies around the world. Against the backdrop of consistent 6 % GDP growth rate in the previous two decades, the past three years witnessed the economy growing at 8 % annually. For the last fiscal year 2006-07, the growth rate has been tentatively placed at 9.2%. In this light, our Government’s goal to achieve the growth of economy at 9-10% for the next decade or more has become credible. 5. My purpose in referring to this happy development is only one. Speaking to this audience in a most friendly country, South Africa, I am happy to convey the willingness –, in fact, keenness – of my Government and India Inc. to share our success, expertise and experience with you. 6. In contributing to India’s economic growth and, more importantly, in transforming an average foreigner’s perception of India, Information and Communications Technology Industry (ICT) has played a pivotal role. Over the past decade, it has become one of the fastest growing industries in India. The growth of IT industry within India and its external linkages stretching to four continents have been widely noticed and analysed. 7. The importance of IT industry for India could be gauged from the basic fact that its contribution to the country’s GDP is estimated to rise from 4.8% in 2005-06 to 7% by 2007-08. Software and ITES industry has grown at the compounded annual growth rate (CAGR) of 31% during the past five years. In 2006-07, software and ITES exports by India are likely to exceed US $ 31 billion as compared to US $ 12.9 billion in 2003-04. And our aim for the year 2012 is to cross US $ 100 billion! 8. According to an evaluation prepared by ESC, the total value of India’s electronics and software production during 2005-06 stood at US $ 42 billion. Out of this, US $ 26 billion was exported. The share of electronics and IT in India’s overall exports, amounted to over 14%. 9. It is noteworthy that the composition of ICT industry has been fairly widespread. In software products, the gradual shift is from low end to the higher end. In ITES including BPO and offshore activities, the industry’s trend is progressively more skills-oriented, with a greater emphasis placed on specialization and sophistication. This has created a strong momentum in new areas such as Knowledge Process Outsourcing (KPO) and Legal Process Outsourcing (LPO). At the same time, special attention has been paid to products and services relating to E-business and E-governance. With regard to the latter, India has shown ample examples of the use of ICT in rural India through land records, property registration, passport services, agricultural markets, transport system at regional transport offices, various distance learning programmes as well as other education and literacy programmes. 10. Perhaps a brief reference to the telecom sector is quite apt here. The growth of telecommunications in India in recent years has been phenomenal. We now have crossed the 200 million subscriber mark and thus have the third largest subscriber base. India is adding 7 million telephone subscribers every month. As our Minister of Communications and Information Technology pointed out recently, this amounts to “adding one customer per second during the working hours.” He stressed: “Now the growth of telecom sector in India has surpassed that of China.” 11. Further, the year 2007 has been christened as the ‘Year of Broadband’ in India. At present our broadband penetration is quite modest at 3 million connections. Due to the recent initiatives, it is expected that India would start adding more than one million broadband connections per month before the end of 2007. 12. We are often asked to explain the reasons behind India’s IT success. This is a subject by itself. One cannot do better than referring to the analysis presented by Nobel Laureate Amartya Sen in his keynote address at the NASSCOM Conference in February 2007. He pointed out that the IT sector had benefited greatly from “the visionary move, originally championed by Jawaharlal Nehru” who developed centres of excellent technical education in India such as IITs followed by IIMs as well as other initiatives. Professor Sen further argued that the nature of Indian society and traditions had shown a consistent tendency “to support the pursuit of specialized excellence in general and the development of IT in particular.” The willingness to learn from pursuit of excellence by others, the fascination with Mathematics, and the inclination and ability to carry forward argument have all demonstrated India’s important connections between the development and achievements of our IT industry and India’s intellectual traditions that go back to antiquity. 13. We would also like to maintain that IT industry has flourished greatly in the pro-business environment created by our Government policies and initiatives since 1991. An enlightened, pragmatic approach adopted by our Ministry of Communications and Information Technology too has made its own healthy contribution to this process. 14. I need not go into major advantages and areas of strength of our ICT industry today because you would be better off listening to experts. 15. A look at the direction of our software IT exports indicates that, in the year 2005-06, 88% exports went to North America and Europe. Only less than half a percent of these exports found their way to Africa. This is not a healthy situation at all. In the specific India-South Africa context, India’s ICT exports in the same year to South Africa were valued at about US $ 73 million. One can assume that, taking into account South Africa’s ICT linkages with India, the overall trade figure could be about or over US $ 100 million. 16. Here, one may recall the shared commitment of the President of South Africa and the Prime Minister of India to treble the present value of bilateral trade amounting to US $ 4 billion by 2010. If ICT sector has to play its due role in achieving this goal, it will need to fix a target for itself. I suggest that we may discuss candidly and encourage the business communities of both countries to consider an ambitious but achievable target of half a billion dollars of trade by 2010. 17. Going by the experience of Indian companies already present in South Africa such as TCS, Satyam, Ramco, Zensar, Nihilent Technologies etc, it may be pointed out that the main promising areas of cooperation are software products for banking, insurance, telecom, power, healthcare, e-governance and several other sectors; IT education and training and; electronics hardware products for IT and telecom sectors. The present ICT scene in South Africa offers numerous sub-sectors where natural compatibility with India’s strengths can be promoted. 18. Some of you might argue that it is easy to suggest a target, but where is a matching action plan? I entirely agree and would, therefore, suggest six key elements for an action plan that needs to be developed by the industry. These, in our view, are: An intensive and sustained dialogue involving key industry players; Close and mutually profitable relationship at the institutional level between ESC and CSSA as well as other relevant organizations; Regular participation by Indian companies in Futurex and South African companies in IndiaSoft for the next three to five years; Optimal utilization of the Government level Joint Working Group on ICT; Participation by South Africa in the establishment of Pan- African e-network piloted by Telecommunications Consultants of India Ltd. (TCIL) with full assistance by the Government of India; and Better connectivity between the two industries through a liberal visa and work permit regime by both Governments. 19. May I add that in regard to the above-mentioned elements, my Government is willing to play a pro-active and constructive role in helping the industry in every possible way. 20. In the end, I would like to convey our appreciation to all those who have contributed significantly to the organization of India’s participation in Futurex. In particular, I should refer to the special efforts made by Mr. Roger Dawes, Executive Director, Electronics Industries Federation and Computer Society South Africa, Shri D.K. Sarin, Executive Director, ESC and Shri Navdeep Suri, our Consul General. I have no doubt that industry representatives, working closely with the High Commission of India and its subsidiary offices, will ensure a comprehensive follow-up to this historic initiative. Our goal is the promotion of ICT linkages between India and South Africa in the long term and for mutual benefit. Thank you very much for your attention.