Location choice is limited for ITES firms

NASSCOM 2004

The geographical choice for information technology enabled services (ITES) companies entering or expanding operations is restricted to the top 8 metros, which account for 90 per cent of all ITES facilities in the country. This is the finding of a key study conducted by Nasscom and KPMG.

The study covered 13 clusters across 10 states in India. The clusters are Ahmedabad-Gandhinagar, Bangalore, Chandigarh-Mohali,Chennai, Hyderabad, Secunderabad, Jaipur, Kochi, Kolkata, Mumbai-Navi Mumbai-Thane, New Delhi-Gurgaon-Noida, Pune, Thiruvananthapuram and Visakhapatnam.

The 10 states account for approximately 85 per cent of the country's ITITES exports.

Policy initiatives by key states are no longer the differentiating point and ITES customers are more influenced by the ability and willingness of the state government to facilitate investments as well as use policy incentives to make available relevant infrastructure and human resource requirements, the study further reveals.

Speaking about the study, Sunil Mehta, vice-president of Nasscom said, "The objective of the study is two pronged. First, to have readily available, relevant and reliable information with respect to location choice within India for potential investors and customers. Secondly, to help the industry and the local government understand what drove ITES location preferences and hence guide efforts to improve attractiveness for ITES."

The study also revealed that future attractiveness of locations will be driven by efforts in the form of business and lifestyle improvement, specific incentives to encourage new business, and investments by the state and other agencies towards infrastructure development.