India Develops Information Technology Investment Region
Sept. 24 – Hyderabad is soon to be home to a new Information Technology Investment Region (ITIR) following last week’s approval by the Cabinet Committee on Economic Affairs for new ITIR developments.
The ITIR, which will include special economic zones and industrial parks, is expected to become a key information technology hub in the region and will focus on accommodating small and medium sized information technology (IT) and information technology enabled service (ITES) enterprises.
The investment region will encompass three campuses:
- one located in the Cyberabad Development area;
- one in the Hyderabad Airport Development area; and
- one located in southern Hyderabad’s Uppal and Pocharam region.
The total investment into the ITIR is expected to be Rs2.19 lakh crore (US$35 billion) over a 25 year period, with construction of phase one to be complete by 2018.
Further, the Cabinet Committee on Economic Affairs (CCEA), in an effort to boost investment in IT and electronics manufacturing, has approved a policy resolution granting priority to IT investment regions and will provide funds for infrastructure upgrades. In addition to approving the ITIR in Hyderabad, the CCEA will also sponsor road and rail infrastructure projects designed to increase access to and connectivity between the various ITIR campuses.
The CCEA will utilize the public-private partnership model for the funding of projects within the Information Technology Investment Region, which is expected to increase direct employment in the region by 1.5 million jobs and indirect employment by nearly 6 million.
The ITIR will also benefit from India’s recent status upgrade as an “authorizing nation” under the international Common Criteria Recognition Arrangement, which allows for the certification of electronic and IT products for international consumption.
India is the 17th nation to be awarded the status of “global certifier”, greatly expanding the potential of its IT export market. The new status not only allows India to verify its own products for international export, but it will also attract other regional IT and electronics producers seeking international certification.
“Since this is a manually intensive process, Indian labs will have distinct cost advantages,” said Cellular Operators Association of India’s Director-General Rajan Mathews, citing “lower operating costs [and] reduced labor charges arising from the surfeit of trained and qualified engineers required for such testing.”
Hyderabad currently accounts for 12.4 percent of India’s total IT exports, which are expected to grow by Rs2.35 lakh crore (US$37.5 billion) as a result of the new Information Technology Investment Region project.
Dezan Shira & Associates is a specialist foreign direct investment practice, providing corporate establishment, business advisory, tax advisory and compliance, accounting, payroll, due diligence and financial review services to multinationals investing in emerging Asia. Since its establishment in 1992, the firm has grown into one of Asia’s most versatile full-service consultancies with operational offices across China, Hong Kong, India, Singapore and Vietnam as well as liaison offices in Italy and the United States.
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