Company review – December 2005 Volume 1

| December 3, 2005

December 2005 Volume 1
Article 5.

a) Who is NIKIYOMA Infotech Private Limited?
NIKIYOMA Infotech Private Limited is an Information Technology Solutions and Services firm. We offer services in Information Technology areas including Applications Development and Maintenance, Business Process Management, Project Management, Information Technology and Staffing to our customers worldwide.

b) Where is the head office?
Our home office is located in Pune, India, just 100 miles from Mumbai, India’s financial capital. It is well connected with Mumbai by air, rail and road, and is one of the fastest growing IT centers. It is one of the most livable and business friendly cities in India as it scores quite high in terms of stability, healthcare, culture and environment, education and infrastructure.

c) What is your URL and contact e-mail?
Company URL:
Company Email:
Alternate Email:

d) What advice do you have for foreign businesses coming to India?
Before coming to India, foreign businesses need to consider the following facts. First, instead of taking an “outside in” approach to development, India is growing organically by encouraging domestic entrepreneurship. India has created a nurturing environment for its own entrepreneurs, and has made a number of homegrown companies that can compete with the best Western firms. Secondly, though the labor cost in India is much less than that in the US or Europe, it may erode as wages and salaries rise due to sustained growth in the country’s economy and low inflation rates. This cost advantage will not last indefinitely, and companies should not place too much emphasis on this factor in their decision-making process. Thirdly, foreign firms coming to India should keep in mind that though conditions are slowly improving, bureaucratic delays and poor public infrastructure are to stay for some more time.

e) How can your firm help businesses in Asia?
As software development industry is a key supporting industry, businesses in Asia, as elsewhere, will need these services to co-ordinate and expedite their production, distribution and management. Since Nikiyoma has a right combination of inexpensive resources, robust technology infrastructure and highly skilled English speaking workforce, businesses in Asia will benefit from our offshore outsourcing facilities, which are not only less expensive – but also faster and better.

f) What are the pitfalls of doing business in India?
Foreign businesses should consider the following pitfalls of doing business in India. First, despite being friendly to entrepreneurs, India still has rigid bureaucracy and regulations. Secondly, the execution of infrastructure development is slow and poor. Thirdly, India has non-investor-friendly labor laws. As a result, industries and businesses have to face frequent paralyzing strikes. Fourthly, like in many developed and developing countries, corruption remains a reality.

Fortunately, solutions are being sought. The old rigid bureaucratic regulations are being replaced by business-friendly culture, and the creaking infrastructure is being modernized and replaced. Attempts are being made to introduce greater flexibility to encourage industrial sector investment. Efforts are being made to curb corruption. The Indian Finance Minister, Mr. P. Chidambaram, said in his recent Yale University lecture, “It is our intention to move forward, but at every step the watchword will be caution and placing suitable instruments to prevent financial shocks. We have taken measured steps in banking, insurance, capital markets, securities markets and debt markets.” He appreciated the fact that the international community seemed to have accepted the wisdom of India’s policy to “hasten slowly”.

g) What is the economic future for foreign businesses in India?
The economic future for foreign businesses in general is bright because of the advantages that India enjoys over some of the developing countries in the neighborhood: low cost labor market, English as common language, democratic form of government, entrepreneurial culture, huge population and hence a mammoth market, young population profile, a largest and fastest growing middle class, government’s movement toward greater business friendliness, established legal and judicial systems, highly skilled technical workforce in the fields of software and programming. India has excellent post secondary and university educational systems that specifically develop knowledge-based industry talent.
To be specific about the IT sector, India has global reputation as software hub, attracting FDI in manufacturing research and development. India still remains the top global offshore outsourcing destination. Only India currently has the right combination of cheap resources and robust technology infrastructure for an off-shoring destination. We predict it will continue to pick up the lion’s share of global offshore spending on IT services, which is predicted to total $50bn by 2007.

India is the fourth largest economy in the world, and based on purchasing power parity, has the second largest GDP among developing countries. Last year, the Forbes 200, an annual ranking of the world’s best small companies, included 13 Indian firms. Economic indicators are promising. As the Indian Finance Minister, Mr. P. Chidambaram, said in his recent Yale University lecture, “If one looked ahead in time, the aging profiles of many developed economies meant they would have the choice of either importing people or outsourcing work.”

India’s galloping outsourcing business illustrates how foreign investment and trade have benefited the country. Along with IT and software, business-process outsourcing is perhaps the most open sector. In 2002, it attracted 15 percent of total foreign direct investment and accounted for 10 percent of all exports. By 2008, it is expected to attract one-third of all foreign direct investment and generate $60 billion per year in exports, creating nearly a million new jobs in the process.

India has managed to spawn a number of companies that now compete internationally with the best that Europe and the United States have to offer. India has the most cutting-edge, knowledge-based industries-software giants, pharmaceutical and biotechnology powerhouses.

To make the long story short, procedures are being simplified and streamlined to facilitate business in India.

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Category: Volume 1 Issue 3 December 2005