Bangalore: Japanese companies such as Sony and Hitachi are working with information technology industry lobby Nasscom to bring other firms from Japan to set up operations in India.
Sony and Hitachi, which have captive centres or global in-house centres (GICs) in India, may also set up corporate accelerators to tap into India’s start-up ecosystem, executives familiar with the development said.
“We eventually want to bring many more Japanese companies to India," said Yukio Takeyari, who heads Sony’s software development centre in India. “Not just from an offshoring perspective, but we want them to set up GICs in India. A company cannot just survive on offshoring, we also need innovation constantly."
GICs contribute more than a fifth, or about $20 billion of software exports revenue from the country, according to Nasscom data. It is expected to touch $50 billion of the country’s $225 billion software exports revenue by 2020.
However, Japan’s share of GIC revenues in India is barely 2-3% and Nasscom is working to increase revenues from Japanese GICs. Of the nearly 850 GICs of multinational firms present in India, less than 20 are Japanese. Nasscom formed a new council in April that will focus on the interests of the handful of Japanese companies with captive centres in India.
“In the past, there was no committee like this to connect Japanese GICs. So now we’ve decided, we really want to understand what is happening with each Japanese GIC here in India. The technical talent that is available in India is also reaching a mature stage. There is a lot of future potential for innovation in India and Japanese companies need to understand that," said Takeyari of Sony.
Separately, the likes of Sony and Hitachi are also increasingly looking to leverage India’s start-up ecosystem for software solutions and are potentially mulling over setting up corporate accelerators in India to incubate ideas.
“A number of Japanese GICs are also potentially evaluating and looking at leveraging the accelerator story," said K.S. Viswanathan, vice-president of industry initiatives at Nasscom.
For Japanese companies, staving off competition from rival Korean companies such as Samsung is top priority. Samsung may start a corporate accelerator in India.
Earlier this year, US-based retailer Target Corp. set up a corporate accelerator in India to incubate ideas in the mobility, social media and big data analytics space.
Sony and Hitachi, however, clarified there are no immediate plan of setting up accelerators.
“Definitely, we will look at the possibility (of setting up a corporate accelerator) a few years down the line, but not immediately," said Masayoshi Tamura, general manager of software at Hitachi India Pvt. Ltd.
India is facing increasing competition from other destinations across the globe for GICs and will find it hard to keep up with past growth rates.
“The success of the GIC model in pioneer delivery locations such as India and the Philippines is leading buyers to explore and diversify to other locations," outsourcing advisory firm Everest Group said last week in a research post.