IT edges toward cooperation in India, Pakistan

In a step toward establishing collaboration between the software industries in India and Pakistan, a 20-member IT delegation from Pakistan is for the first time participating in a conference in Mumbai this week hosted by India’s National Association of Software and Service Companies (NASSCOM).

The delegation visit, which comes after a recent thaw in political relations between India and Pakistan, is a follow up to a January visit to Pakistan by Atal Bihari Vajpaye, India’s prime minister, according to NASSCOM.

“This visit aims to enhance business opportunities and also help NASSCOM and PASHA to put together a framework of cooperation for continuous interaction between the two countries in the IT sector,” said Jehan Ara, Karachi-based president of the Pakistan Software Houses Association, of the delegation’s trip to Mumbai.

Although the industries in the two countries have to still work out the areas of cooperation, the visit signals a break from the past for their respective IT industries, which have until now grown independently. There currently are no cooperative efforts between the IT industries, Ara said, adding that one of the immediate opportunities is to collaborate on research and development (R&D).

“Perhaps we can take on different [R&D] challenges and share our findings for the benefit of both the Indian and Pakistani software industry,” Ara said. “We both have a highly educated IT sector, innovative young minds, as well as a base of ex-Silicon Valley professionals.”

India is evidently taking the Pakistani overture seriously. A delegation from the Indian IT industry is likely to visit Pakistan this year, said Kiran Karnik, president of NASSCOM.

Pakistan’s software services industry is still fledgling with annual revenues of about US$50 million. In contrast, India’s software and services industry posted revenues of about US$12 billion in the fiscal year to March 31, 2003, primarily on revenues from work outsourced to the country by U.S. and European companies.

However, Pakistan is also emerging as an outsourcing location for a number of multinational companies including Citibank N.A., DaimlerChrysler Services AG and Time Warner Inc., Ara said, adding that some U.S. technology companies are planning to set up software development centers in Pakistan.

Both Indian and Pakistani software companies may set up operations across the border, to take advantage of the low-cost, skilled workers in both countries, analysts said. NetSol Technologies Inc., a Calabasas, California -based software company founded by Pakistanis, announced last December that it is planning to acquire a software development operation in India to supplement its current one in Lahore, Pakistan.

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