rediff.com Business News: Pramod Mahajan heads for the US to woo investment

Indian Information Technology Minister Pramod Mahajan leaves India on Saturday for a week-long visit to the US where he will sell India as an investment destination to computer millionaires and venture capitalists.

"Mahajan will speak to the heads of several big firms in Silicon Valley. He will also meet venture capitalists and fund managers and draw their attention to India's booming software industry," an official said.

Mahajan's itinerary includes meetings with the bosses at US microchip giant Intel Corp, Internet hardware and software supplier Sun Microsystems, Silicon Graphics and Microsoft.

India's IT sector reaped the lion's share of the potential economic windfall from President Bill Clinton's state visit in March, and industry insiders say Mahajan is keen to build on the success.

"Clinton's visit resulted in nearly $ 4.4 billion worth of business accords signed in various sectors -- the bulk of them in-principle agreements with Indian IT firms," said M Murlidharan, chief of software firm Kilban Limited.

Dewang Mehta, chief of India's 520-member National Association of Software Companies, or NASSCOM, who will be part of Mahajan's entourage, said that the business deals were secondary.

"What is significant is that Clinton acknowledged India as an emerging IT superpower. We heard one message loud and clear throughout the presidential visit and that was India and the United States would work together in the IT sector, irrespective of any political differences," Mehta said.

"The visit will give a new dimension to the economic agreements signed during Clinton's visit and emphasise on partnerships, collaborations and joint ventures in areas of mutual interest," said the official.

Experts say the IT minister is keen to "keep up frequent official and business-to-business level contacts" with the US as India nurses its ambition to become an IT superpower on the strength of its skilled manpower.

India launched its answer to Silicon Valley in the 1980s in the southern city of Bangalore, which now ranks amongst the top five world-class IT centres. It boasts of the cheapest pool of skilled manpower.

Of the 4,500 enterprises currently in business in Bangalore, over 1,500 have some foreign component, with total foreign investment reaching $ 2.14 billion in 1999.

Mahajan will meet software millionaires of Indian origin in the US to pick their brains on emerging areas in the IT sector with high growth potential.

"This meeting will help the minister fine-tune India's IT policy to match global requirements," said an official.

He added that Mahajan was likely to highlight the fact that the passage of a IT bill in both houses of Indian Parliament this week made India a part of a select group of 12 countries which have cyber laws.

"With the cyber laws in place, India is on the brink of giving a major push to electronic commerce. Therefore, Mahajan is keen to make contact with some of the big American online retailers such as Amazon.com," the official said.

Mahajan will also discuss other policy initiatives India has taken in recent months to liberalise investment in the Indian IT sector.

India has recently announced that foreign firms will enjoy a tax holiday of up to ten years for setting up units in Indian software technology parks. They will enjoy similar benefits if they are engaged in IT research.

Mahajan returns to India on May 26 after visiting the US cities of Chicago, San Francisco, New York, Washington and Boston.

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