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National Innovation System and the Emergence of Indian Information and Software Technology Multinationals
National Innovation System and the Emergence of Indian Information and Software Technology Multinationals
Jaya Prakash Pradhan2000, SSRN Electronic Journal
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Working Paper
No: 2007/09
NATIONAL INNOVATION SYSTEM AND THE
EMERGENCE OF INDIAN INFORMATION AND
SOFTWARE TECHNOLOGY MULTINATIONALS
Jaya Prakash Pradhan
ISID
May 2007
I SI D
W or k in g Pa pe r
2007/ 09
NATIONAL INNOVATION SYSTEM AND THE
EMERGENCE OF INDIAN INFORMATION AND
SOFTWARE TECHNOLOGY
MULTINATIONALS
Jaya Prakash Pradhan
Institute for Studies in Industrial Development
4, Institutional Area, Vasant Kunj, New Delhi - 110 070
Phone: +91 11 2689 1111; Fax: +91 11 2612 2448
E-mail: <info@vidur.delhi.nic.in> Website: <http://isid.org.in>
May 2007
Electronic copy available at: http://ssrn.com/abstract=1515648
ISID Working Papers are meant to disseminate the tentative results and findings
obtained from the on-going research activities at the Institute and to attract comments
and suggestions which may kindly be addressed to the author(s).
© Institute for Studies in Industrial Development, 2007
PREFACE
On 10th October 2005, I received an e‐mail from Karl P. Sauvant, who wanted a press
release on Indian Transnational Corporations (TNCs) with an idea to ‘identify the main
players to watch, how they have expanded internationally through FDI and to give a
sense of the dynamics of the process’. He suggested releasing it in early 2006 as a joint
Columbia University‐ISID (Institute for Studies in Industrial Development) press release.
I formally accepted his suggestion on Indian TNCs and the work began in December
2005.
The work, which was initially thought to be a small piece on Indian TNCs, turned out to
be a larger study. The existing data sources on Indian companies investing abroad like
the erstwhile Indian Investment Centre or unpublished database of the Ministry of
Finance, Government of India just provide data on name of Indian investing company,
approved amount of investment, ownership participation and name of host country.
However, these sources do not provide information on actual number of overseas
subsidiaries of Indian firms, names of overseas subsidiaries, foreign sales and fixed
assets, etc., which are needed for the proposed study. I realized that a new database
needs to be constructed on the overseas business operations of Indian multinationals.
Without a reliable dataset any study on Indian multinationals may not be able to throw
more light on their overseas activities, the precise objective of the present study. I started
constructing a dataset manually on Indian multinationals based on individual company’s
annual reports and information collected from their websites. Later my colleague, Mahua
Paul, had shown interest in the subject and offered her help in compiling the dataset.
After working for a couple of months she opted out from the project, obviously for
tardiness and painful manual work of data compilation. I was again alone in the work
and continued the data compilation myself.
Finally, I decided to proceed sectorally—targeting the most internationalized sector of
Indian economy first and then moving on to other less internationalized sectors in
descending order. The Indian software sector was selected and the work proceeded on a
long drawn research exercise. This is the first report in a series of reports on Indian
multinationals to be released in due time. I hope that these studies can help policy
makers, researchers and thinkers to enhance their knowledge on Indian multinationals
and better appreciate their role in the context of growing globalization of production
from developing countries. I deeply appreciate Karl Sauvant for his suggestion on the
press release that ultimately led to the present study on Indian multinationals. Vinoj
Abraham has provided useful comments on the paper. I also acknowledge my colleagues
at ISID, S.K. Goyal, K.S. Chalapati Rao, K.V.K. Ranganathan and others for their support
and encouragement during the preparation of this study. Editorial help from Ms. Puja
Mehta is thankfully acknowledged.
CONTENTS
Preface
i‐ii
Abstract
1
1. Introduction
1
2. National Innovation System and Internationalization: A Theoretical Note
3
2.1. Agents of Innovation
4
2.2. Interaction and Inter‐linkages among Innovation Agents
6
2.3. NIS and Internationalization
8
3. NIS and Rise of Indian IST Multinationals
10
3.1. The Evolution and Transformation of the Indian IST Industry
10
3.2. Emergence of Indian IST OFDI
20
4. Indian IST Multinationals: Main Features
21
4.1. Geographical Composition
22
4.2. Ownership Pattern
25
4.3. India’s Leading IST Multinationals
26
4.4. Firm‐specific Characteristics of Indian IST Multinationals
29
5. Case Study of Two Selected IST Multinationals
31
5.1. Tata Consultancy Services Ltd.
32
5.2. H C L Technologies Ltd.
39
6. Conclusion
45
6.1. Implications for Developing Countries
46
i. Establishment of Skill Institutions
46
ii. Improvement in Infrastructure and Promotion of IT Usage
47
iii. An Outward‐looking Policy Regime
47
6.2. Implications for India
47
6.3. Implications for Indian IST Firms
48
Reference
49
Appendix
52
List of Tables
Table‐1
Indian OFDI Stock (In $ million), 1976 to 2006
Table‐2
Electronic Production in India, 1981–1990
13
Table‐3
Electronic Production in India, 1991–2000
17
Table‐4
Resources Raised by Electronics and Information Technology Firms
from Indian Capital Market, in Rs. crore.
17
Software Exports by Software Technology Parks of India,
1991–92 to 1999–00
18
Table‐6
Electronic Production in India, 2001–2005
19
Table‐7
Geographical Distribution of Overseas Subsidiaries, Joint Ventures
and Associate Companies of Indian IST Multinationals, as in 2006
23
Table‐ 8
Ownership Patterns of Indian IST Multinationals
26
Table‐9
Top Sixty Indian IST Multinationals by Number of Overseas Ventures 27
Table‐10
Foreign Assets and Sales of Top Eleven Indian IST Multinationals,
2005–06
28
Difference between Indian IST firms with and without Overseas
Subsidiaries, 2005
30
Table‐12
Results from Wilcoxon Rank‐Sum (Mean‐Whitney) Test
30
Table‐13
The Size of TCS, 2001–2006
34
Table‐14
Composition of TCS’ Global Revenue, 2005–2006
34
Table‐15
Assets and Turnovers of TCS’ Foreign Subsidiaries, 2005–2006
35
Table‐16
Acquisition by TCS, 2001–2006
38
Table‐17
Acquisition by HCL Technologies, 2001–2005
41
Table‐18
Geography of HCL Technologies’ Foreign Assets and Sales,
2005–2006
42
Assets and Turnovers of HCL Technologies’ Foreign Subsidiaries,
2005–2006
43
Information on Overseas Subsidiaries of Indian IST Multinationals
52
Table‐5
Table‐11
Table‐19
Table‐A1
2
List of Figures
Figure‐1
National Innovation System and Internationalization
Figure‐2
Overseas Subsidiaries, Joint Ventures and Associate Companies of
Indian IST Multinationals
4
23
NATIONAL INNOVATION SYSTEM AND THE
EMERGENCE OF INDIAN INFORMATION AND
SOFTWARE TECHNOLOGY MULTINATIONALS
Jaya Prakash Pradhan *
[Abstract: The dramatic growth of outward FDI from India over the past decade is significantly led by
Indian information and software technology (IST) firms. These IST firms have aggressively adopted
outward FDI as a competitive strategy for seeking overseas markets, networks, skills and technologies.
This study analyzes the factors leading to the emergence of these Indian IST firms as multinationals in
the global market. Applying the theoretical framework of national innovation system (NIS), the study
establishes that origin of Indian IST multinationals are critically linked to the overall policy environment
and strategic government intervention in skill formation, development of supporting institutions,
proactive role of Indian households in undertaking human capital investment and providing risk taking
entrepreneurs, and also to the firm‐level business strategies. The Indian experience shows that the
development of a suitable NIS is required if other developing countries are aspiring to build their
capability in the IST industry.]
1. Introduction
The dramatic growth of outward investment activities by Indian multinationals since the
last decade has motivated a growing literature on the study of the behaviour of these
multinational firms (Pradhan, 2004, 2005, 2007; Pradhan and Sahoo, 2005; UNCTAD,
2004, 2005, 2006; Sauvant, 2005). The actual stock of Indian direct investment has risen
from about US $46 million in 1980 to US $8181 million at the end of February 2006 (Table‐
1). A key feature of the recent wave of Indian outward foreign direct investment (OFDI)
has been the emergence of Indian information and software technology (henceforth IST)
firms as the most aggressive outward investors from the Indian economy (see Pradhan,
2003, 2005 for detailed analysis). These firms together with firms from communication
sector contributed about 56 per cent of total approved OFDI undertaken by the service
sector alone in the late 1990s and about 30 per cent of OFDI by all sectors of the economy.
*
Assistant Professor at the Institute. For communication, E‐mail: pradhanjayaprakash@gmail.com
Table‐1
Indian OFDI Stock (In $ million), 1976 to 2006
Year
Number of
Approvals
Value
As on 1.1. 1976
As on 31‐8‐1980
As on 1‐9‐1986
As on 31‐12‐1990
As on 31‐12‐1995
As on 31‐3‐2000
As on 28‐2‐2006
133
204
208
214
1016
2204
8620
OFDI Stock ($ million)
Approved
Percentage Change
Value
‐‐‐‐‐
213
‐24
‐‐‐‐‐‐
‐‐‐‐‐‐
332
295
38
119
90
NA
961
4151
16395
17
46
75
NA
212
794
8181
Actual
Percentage Change
‐‐‐‐‐
171
63
‐‐‐‐
‐‐‐‐
275
930
Note: NA–Not available.
Source: Pradhan (2007), based on Ministry of Commerce, Indian Investment Centre, and Ministry of
Finance.
The expanding magnitude of OFDI by Indian IST firms raises several issues: Why are
these firms investing abroad? Where are they investing? What are their competitive
advantages for overseas investment? What set of problems they face while operating in
overseas markets? Are there government agencies that provide timely information and
assistance to these firms on the various aspects of host countries? What are the policy
lessons that the Indian experience offers to other developing countries that want to
develop their own capability in the IST industry?
The present study is an attempt to identify the factors that led to the rise of Indian IST
industry and its overseas investment activities. Although, recently a number of empirical
studies on Indian overseas investment have appeared, the present study seeks to
contribute to the literature on two directions. First, these existing studies mostly rely on
approved and actual OFDI flows data to analyze the behaviour of Indian multinationals
but invariably provide incomplete picture and fail to identify the leading actors and their
overseas subsidiaries. This study, based on a new dataset of Indian subsidiaries abroad,
goes on to analyze the behaviour of Indian multinationals that are actually operating
today. Secondly, the previous studies (Pradhan 2003, 2004) have explored the firm‐
specific advantages that led these Indian firms to invest abroad from a narrow theoretical
framework. For example, they presumed the existence of some firm‐specific advantages
like technology, skill, advertising, etc., to start with and then proceed to identify which
factors are in fact influencing the OFDI behaviour of domestic firms. In this process, these
studies have failed to integrate the larger forces that led to the emergence of these
advantages in the first place. In my view, unless the theories of foreign direct investment
assimilate the forces that cause firm‐specific advantages to appear with firms’
internationalization process, we still lack a satisfactory theoretical framework to analyze
2
OFDI behaviour of firms. In this paper, I have proposed the use of the theoretical
framework of national innovation system (NIS) to analyze firms’ OFDI performance and
to gain a larger understanding of the phenomenon. In the next two sections, I elaborate
on this theoretical framework to explain OFDI by firms in general and apply the same to
the case of Indian IST industry. Section 4 presents the geographical patterns of Indian IST
multinationals, their ownership choice and undertakes identification of large IST
multinationals with indicators on the extent of their global production. The firm‐specific
characteristics of Indian IST multinationals are also explored in this section. A brief case
study of two selected large Indian IST multinationals is undertaken in Section 5. These
case studies are inspired by the specific objective of examining the causes and
motivations of IST firms’ OFDI activities in the NIS theoretical framework. Section 6
concludes the study, summarizing main the lessons that other developing countries can
learn from the Indian experience in the IST industry.
2. National Innovation System and Internationalization: A
Theoretical Note
In the last decade or so there has been a growing realization among policy makers,
researchers and technology practitioners across the world that national firms are just one
of the agents of innovation and their innovativeness can’t be completely related to their
own firm‐specific technological efforts alone. Following the pioneering works of
Lundvall (1985) and Freeman (1988) a flowering literature has emerged to emphasize that
innovation and technology developments of a nation are a result of a complex and
dynamic interactive process among different agents that generate and commercialize
new knowledge through changes in products, processes, or services. This literature
(Lundvall, 1992; Nelson, 1993; OECD, 1997; among others) has come to be known as
‘National System of Innovation’ (NIS) perspective of innovation.
Before the arrival of NIS approach, the nature of innovation process was narrowly
interpreted and the focus of science and technology policies was restricted to encourage
R&D investment in the economy (OECD, 1997; Abrunhosa, 2003). Both public and
private sector firms were provided with a host of incentives to undertake that basic
research which is ultimately determined by market parameters like fragmentation of
demand, market power, cost advantage and profitability. The NIS perspective concurs
that the innovation process is usefully represented by technology variables like R&D or
patents but these variables alone fail to provide the complete analysis of the actions and
interactions of all the agents involved in that process.
3
Figure‐1 presents my interpretation of NIS for an economy and relates the same to the
process of internationalization. There are three related components in the present
figure—(i) modes of internationalization, (ii) agents of innovation and their inter‐
linkages, and (iii) agents’ functions and characteristics. First, I will take up the latter two
components to elaborate on the concept of NIS.
Figure‐1
National Innovation System and Internationalization
Modes of
internalization
Agents of innovation and their
inter-linkages
Agents’ functions and
characteristics
Firm-specific factors
Export
Market characteristics
FIRM
Outward
direct
investment
Overseas
acquisition
Overall Business Environment
Supply of Labour
HOUSEHOLD
Supply of Entrepreneurs
Provision and incentives for skill formation
Overseas
inter-firm
alliances
NATIONAL INNOVATION
Provision of physical infrastructure like
transportation, power, and communication.
GOVERNMENT
Provision of technological infrastructure
Policies related to industry, trade, foreign
investment, technology etc.
Public Sector Firms and technology creation
Political institutions
Legal institutions
INSTITUTIONS
Administrative institutions
Financial institutions
Source: Own construction
Research institutions and universities
2.1. Agents of Innovation
NIS comprises four agents of innovation, which undertake innovative activities or create
conducive atmosphere for such activities. They are firms, household, government and
institutions. In today’s economies, a significant part of national innovation takes place
within the firm or industrial sector itself. Firms in their drive to grow and survive
undertake various technological and specialized R&D functions to improve their
production process, product, quality, and design. There exists a rich firm and industry‐
4
level R&D literature that investigates the factors that motivate firms to undertake R&D
activities. The decision of a firm to undertake R&D is strongly determined by a set of
firm‐specific factors like firm size, age, linkages with global market (i.e. foreign
investment, export‐orientation, technology licensing), location (i.e. rural‐urban), etc.
Apart from these factors, their R&D behaviour is also related to market characteristics
like concentration, inter‐sectoral differences in technological opportunities and demand
characteristics, etc. The overall business environment like growth expectation, movement
in prices, interest rate, exchange rate, and changes in public policies, etc., also influences
firms’ ability to undertake R&D.
The importance of households to the innovation process may be traced to their two
important contributions. They are the source of productive labour and entrepreneurs. By
supplying skilled and technical labour force to the firms, household plays a significant
role in firms’ technological activities. Households are also the source of entrepreneurs
who identify market opportunities, undertake risks and ultimately start the productive
units called firms. Besides, households also subscribe to the equity capital of enterprises
and thus are a source of finance for them, indirectly affecting their innovative activities.
In NIS, government also plays a critical role. Public investment has an important
influence on the provision of social, economic, and technological infrastructure like
educational facilities (schools, colleges, universities, and training centre), hospitals,
public housing, transport networks (railways, roads, water and airways),
telecommunications, power, public research institutes and laboratories, etc. These
infrastructures have a positive impact on labour quality and investment. They also lead
to reduction in business costs, increase in quality and reliability of production process,
and improvement in accessibility of firms to technological infrastructure. In this way
public capital not only encourages the establishment of new firms, but also makes
possible firms’ expansion, favourably influencing their R&D decisions. Public policies
with regard to trade, technology and foreign investment tend to determine market
structure, competition, export‐orientation and inter‐firm technological linkages. Fiscal
incentives for innovation activities, waiver of imports duties on capital goods and
machineries imported by firms for innovation, are other mediums by which government
plays its role in encouraging national innovation. Starting of public sector always remain
a direct form of government intervention in the creation of local technological and
production capabilities. Studies indicated that public innovation spending like defense
and basic research in countries like US have played a crucial role in their national
innovation and technological change via valuable spillovers to the rest of the economy
(Krugman, 1987).
5
The importance of institutions for human creativity and innovation can hardly be
undermined. A democratic and decentralized political institution along with an efficient,
independent, and impartial legal institution (judiciary as well as law enforcing agencies)
protects human freedom, choice and creativity. They help economic agents to undertake
their respective activities of production, trade, and consumption with minimum
transaction and information costs in an economy. Transparency and accountability in
general administration and good governance system tends to strengthen the usefulness
of public resources for development purposes. Development of financial institutions like
banks, capital market, and venture capital improve accessibility and timeliness of finance
for entrepreneurs to turn their vision into enterprises and businesses. Research
institutions and universities come to be the centre of knowledge flows and their
networking with business firms are of critical importance for NIS.
2.2. Interaction and Inter‐linkages among Innovation Agents
The interaction and linkages between innovative functions of different agents form a
system which is known as NIS. This is a more integrated approach to understand
innovation process of an economy than just looking at traditional R&D or patent statistics
since this system explicitly takes into account the fact that innovativeness of agents are
interdependent in real market situation. Although these agents are connected in systemic
ways, there always exists a possibility of inefficient synergies between their activities
which in turn can negatively affect the innovative process.
In Figure‐1, bi‐way arrows of a curve or a line connecting two agents indicate that their
relationship is dominated by reverse causation. Let’s take the relationship between firms
and household. The innovation function of firms is crucially dependent upon the
availability of skilled and R&D manpower in the economy. Household decides the extent
of investment in human capital like general and technical education, health, etc., for its
member and is the supplier of skilled workers in the labour market. An economy where
households invest more in human capital is likely to have a pool of trained labour force
easily available for innovative activities of firms than another economy where its
households shy away from undertaking such investment. Firms also influence the nature
and content of human capital investment made by households since all the employees of
firms are primary members in households. In other instances firms generate demand for
a particular skill thus raising returns to that particular human capital and households in
turn positively get affected to send their members for acquiring the concerned skill.
The relationship between government and household is also interdependent. Public
sector investment in schools, colleges, management, technology, and science institutes,
6
improves households’ access to education and positively affects their human capital
investment. Government incentives for education like provision of cheap educational
loan, liberal scholarships, freeships, and free study materials also increase the value of
government service in the education of households. Social investment in roads, health
and sanitation all positively influence the household’s preference for higher human
capital investment. Members in households as electorate influence the government
support for education and thus are part of the decision making process in a democratic
political system.
The link between government and firms for innovation is quite strong indeed. In several
ways governments across countries have been influencing the way in which their
industries evolve and attain competitive maturity. The fiscal incentives in the form of tax
breaks and subsidies by governments for in‐house R&D activities can push the pace of
innovation in targeted sectors or their industrial policies covering foreign investment and
trade can determine the market structure, which will ultimately impact the firm‐level
R&D activities. For example, providing strong protection from imports and foreign
investment and encouraging small firms led industrialization would definitely introduce
size‐based limitation for achieving higher levels of innovation. The particular nature of
patent regime these governments follow also affects the innovative activities of firms
given the level of economic development. Developing countries like India with low levels
of technological strength in knowledge‐intensive industries like pharmaceuticals may
like to have a short‐duration process patent policy so that their infant domestic firms can
use adaptive, incremental and reverse engineering forms of technological innovation to
grow and gain their own competitive advantage. In Indian pharmaceutical industry, the
starting of the public sector enterprises in the 1950s–60s had strong positive spillovers on
domestic sectors for skills and local technology creation (Pradhan and Alakshendra,
2006) and hence government direct R&D spending can also determine the R&D activities
of industrial firms. It is also a well known fact that corporate or industrial lobbies are a
powerful group that influences government policies to serve their corporate interests. In
the US, the pharmaceutical and health products industry had spent more than $800
million in federal lobbying and campaign donations at the federal and state levels in the
past seven years (Centre for Public Integrity, 2005). As a result of industryʹs pressure, the
U.S. government contributes more money to the development of new drugs through
fiscal subsidies than any other government in the world.
A higher level of innovative activities of firms may not be actualized in an environment
of political instability, uncertainty of life and property, weak laws and order system,
corruption, severe restrictions on human freedom and creativity, etc. Efficient institutions
that tend to remove general uncertainty of life, to ensure availability of finance,
7
transparency in dealing with business, existence of centre of knowledge like universities,
play their own part in influencing the industrial R&D in an economy.
2.3. NIS and Internationalization
When each innovation agent plays its complementary role in expanding the innovation
process, industries and firms evolve out of a growing sophisticated NIS. The growing
firm‐specific technological capabilities that are a result of cumulative interactive process
between firms and other innovation agents ultimately led these firms to reorganize
themselves into global value chains by undertaking different internationalization
activities.
Once national firms achieve their competitive edge in innovation and technology, then
the traditional theories of FDI play their role in explaining the nature of OFDI behaviour
of outward investing firms. National firms may like to exploit their technological
superiority in world market and depending upon relative benefits and costs they may
chose any of these strategies or a combination thereof—manufacture the products and
export to overseas market or license out their technology to a local player in the host
market, or choose to produce the product in the host location by themselves (Figure‐1).
The industrial organization theory of FDI (Hymer, 1960; Cave, 1971; Kindleberger, 1969)
presupposes that outward investing firms must possess some firm‐specific advantages
which are easily transferable to overseas location. This theory does not go beyond the
apparent market imperfections in which firms tend to have asymmetric access to
product, production process, know‐how, brand name, skills to explain the reason for the
existence of these firm‐specific advantages. This is where NIS gives a greater picture of
forces that lie behind the creation of these advantages in certain industries and, within
them, certain firms. NIS recognizes that there are regional and sectoral variations in the
interaction of different innovation agents like government, household, and institutions,
besides firm‐specific variations in innovative capabilities. In a federal set‐up like India,
states have their own governments, industrial policies and a set of locational advantages
like skill, power, transportation infrastructure, etc. In this framework, states with suitable
policy and locational advantages are likely to host a particular industry than states
lacking those suitable factors. This kind of variation can also be noted within a particular
state. For example, starting of a firm may be easier in an urban area than in rural area
since financial institutions are well developed in former area. A firm located in one urban
area may have easy access to required skills due to location of large number of
favourable institutions than another firm in another urban location lacking such
institutions.
8
With all these variations in NIS, a set of advanced firms with technological and
marketing advantages appears to think in terms of a global market. As far as out‐
licensing as a strategy of exploiting firm‐specific advantages abroad is concerned, firms
find internalization of these advantages (i.e. directly producing abroad via FDI) as the
most efficient strategy to overcome the transaction costs and imperfections involved in
the global markets for technology (Rugman, 1985, 1986; Buckley and Casson, 1985;
Buckley, 1988). There are several reasons for firms to choose FDI over exports like tariffs,
transportation costs, cheap factor prices in host location, etc. In the proximity
concentration trade off hypothesis, Brainard (1997) assumed that export strategy
compared to FDI strategy entails higher variable and lower fixed costs. Resourceful firms
prefer to invest in a plant in foreign location (high fixed costs) with complete elimination
of transport costs associated with exports from home country whereas firms that are not
able to undertake this substantial fixed costs associated with foreign production will
chose to undertake variable costs of exporting and small amount of fixed costs in
building trade supporting networks abroad. Dunning (1980, 1988) has proposed an
eclectic theory of FDI that encompasses theories existed before him. According to this
framework, firms’ FDI decision depends not only on ownership and internalization
advantages as discussed above, but also on locational advantages offered by host
countries. The relative locational advantages of a potential host country like market size
and growth, geographical and cultural distance, availability of good infrastructure, low
cost skilled manpower, etc., in relation to other competing potential locations explain
whether a firm will invest or not in that particular location.
Besides FDI and exports, firms can also take other internationalization strategies like
overseas acquisition and inter‐firm strategic alliances. Overseas acquisition strategy can
be adopted by a variety of firms and for variety of reasons. Technologically backward
firms from NIS representing a home developing country may like to acquire knowledge
resources in advanced countries, which are the centre of innovation activities at the
global level. Technologically advanced firms may also adopt this strategy to acquire
complementary strategic resources like technologies and marketing distributions and to
enter the foreign markets (Pradhan and Abraham, 2005). Strategic inter‐firm alliances are
also increasingly becoming a new mode of internationalization in which firms from
different NISs cooperate with each other according to their firm‐specific advantages in
different parts of a value‐chain (Pradhan and Alakshendra, 2006). For example, given
their cost‐effective process a large number of Indian pharmaceutical companies are
supplying raw materials and bulk drugs to developed country firms which in turn
produce the formulations and market the world over. These strategic alliances in the
form of contract manufacturing, collaborative R&D and marketing are beneficial for
firms from both developed and developing countries and suggest that globalization not
9
only increase inter‐firm competition, but also inter‐firm cooperation based on their
competitive advantages in different parts of a value chain.
It is important to emphasize here that these internationalization strategies also affect NIS.
Export activities demand continuous innovation and learning whereas OFDI can act as a
channel of knowledge spillovers to the home country. Overseas acquisitions of
technologies and skills also help the acquiring national firms to improve their
technological strength. There are also inter‐relationships that exist among different
internationalization strategies.
3. NIS and Rise of Indian IST Multinationals
By the early 2010s the Indian information and software technology sector had emerged as
a major player in the global market with its phenomenal growth performance and
significant structural transformation in terms of moving up the value chain. This led to
the emergence of a large number of Indian IST firms investing cross‐border and
acquiring increasing number of businesses abroad. Presently, the IST sector is the most
globalized and internationalized sector in the Indian economy. In this section, I have
explored how NIS of India has contributed to the growth of this sector and thus led to the
emergence of a large number of multinationals from this country. A recent study by
Joseph (2006) has competently explored the role of various NIS elements like
infrastructure, R&D, government policy, trade regime, etc., in the rise of IT sector in India
and the ASEAN countries. However, this study has not gone beyond to link the growth
process of Indian IST sector with the rise of Indian IST multinationals.
3.1. The Evolution and Transformation of the Indian IST Industry
The Indian IST industry has passed through different periods of development with
different innovation agents playing their respective roles. Since the introduction of
computer in 1955 1 at the public sector research institute to the exit of IBM (International
Business Machines Corporation) on June 1, 1978, India’s exposure to computer hardware
was nascent with little domestic capabilities for manufacturing. In spite of policy
initiative that set up a computer division in the Electronics Corporation of India Ltd.
(ECIL) in 1969 to set the direction towards self‐reliance in computer technology, the
industry was completely dominated by foreign players like IBM and International
1
A Russian computer URAL—1&2 was introduced at the public sector research institute, Indian
Statistical Institute (ISI), in 1955.
10
Computers Limited (formerly known as International Computers and Tabulators), with
IBM alone controlling about 70 per cent of the Indian computer market.
The exit of IBM due to implementation of Foreign Exchange Regulation Act (FERA) 2 has
contributed to the entry of new domestic firms, mainly government owned, into
computer manufacturing and system maintenance. The starting of the these public sector
companies was strongly propelled by strategic importance of the industry for defence
and restrictions imposed by developed countries like US on India’s access to high‐
performance computing systems. The public sector company ECIL Ltd. took the leading
role in indigenous hardware manufacture and started producing 12‐bit systems in 1977.
In addition, ECIL has also generated a strong spillover impact on the training and growth
of high caliber technical and managerial manpower related to computers and
information technology. In 1976, Computer Maintenance Corporation (CMC) Ltd. was
set up to look after system maintenance and the Department of Electronics and the
Electronics Commission that came up in early 1970s to laying down the policies to guide
the development of electronics industry in India.
The positive spillovers from past foreign investment like IBM, public sector investment,
and an unfulfilled demand for computers led to the emergence of a number of privately
owned Indian companies like HCL (Hindustan Computer Ltd.) and DCM Data Products
with their own microcomputers. Most importantly, ECIL and HCL had their own
operating system alternative to foreign operating systems. The availability of a pool of
extremely skilled programmers and entrepreneurs created by IBM had in fact played an
important role in the development of indigenous companies. In fact Indian companies
like IDM, CMC, ICIL, and HCL were set up by ex‐employees of IBM 3.
Although, India was a pioneer in having operating systems and most of the demands for
software were met in‐house in the 1970s, the growth of software industry was severely
limited due to a low base of computer usage in the country. It is estimated that at the end
of 1977, there were just 450 computers installed in the country (Sharma et. al., 2006).
However, then increasing usage of computers since early 1980s led to a higher demand
for computer software and technology. In this way, computer software grew in India as
2
3
FERA required that foreign companies without having meaningful manufacturing base in India
must dilute their ownership to 40 per cent of the equity. IBM refused to dilute its controlling
interest and left India whereas the British company ICL diluted its foreign equity to 40 per cent
and became ICIM.
Dataquest (2006) ‘...Companies that defined Indian IT’, Saturday, December 30; Harding, E. U.
(1989) ‘After IBMʹs exit, an industry arose; India offers a development alternative for U.S. firms
facing make/buy decision’, Software Magazine, November 15.
11
part of the broader process of development of the computer (and electronics) industry
(Radhakrishnan, 2003). Like computer hardware, public sector investment has assumed a
leadership role in the development of computer software industry. The public sector
company, CMC, that was providing system maintenance service to IBM installations at
over 800 locations in the country, subsequently emerged as the leading player in software
development for both the indigenous and overseas markets (Dataquest, 2006).
The early 1980s to early 1990s marked the second stage of the transformation of Indian
IST industry. The Indian electronic industry grew by a compound rate of 24.6 per cent in
1981–1990, from a mere US $965 million in 1981 to a noticeable US $5465 million (Table‐
2). Over the same period, the computer hardware segment has grown by even more
impressive rate of 38.9 per cent and the computer software by 34.3 per cent. As a result of
better growth performance by computer hardware and software segment as compared
with others, their share in total electronic production has gone up respectively from 3.5
per cent to 10.7 per cent and from 0.7 per cent to 4.2 per cent. The rapid growth of
domestic software at 105.8 per cent during this period is due to its extremely low base
value.
The relatively higher growth performance of IST segment in India’s electronics industry
is related to suitable changes in public policy and international developments (Joseph,
2006). The adoption of National Computer Policy 1984 heralded a new liberalized policy
regime for computer hardware and the Computer Software Development, Export and
Training Policy 1986 visualized an outward looking strategy for software industry. This
new policy has removed prior government approval for capacity expansions and put in
place single window system of approval for broadly defined products for computer
hardware. Computer software was recognized as a separate industry and a Software
Development Agency (SDA) was established for its overall growth. Tariffs and import
duties were slashed for imports of components and inputs for software development and
a liberal view was adopted towards foreign technology imports and foreign
collaborations. Similar to hardware, large domestic and foreign companies were allowed
to become software producers. Various fiscal and non‐fiscal incentives were provided to
promote software exports like simplified procedures, granting export‐oriented software
units a liberal access to foreign exchange and exemption from 40 per cent ceiling on
foreign ownership under FERA, allowing import of software packages/programmes
under open general licence (OGL), according copy‐right protection to software, etc.
The government procurement has also added another growth push for the industry.
Government spending for computerization of government offices from central to district
level, the establishment of National Informatics Centre (NIC), etc., fuelled the growth of
the industry. These policies changed the overall market condition with removing policy‐
12
led barriers to entry and improved market competitiveness. The changing policy regime
in India coincided with two important developments in international markets—(i)
emergence of IBM PC as the global standard for micro‐computing, and (ii) rise of
regional clone markets like Singapore, Hong Kong, South Korea and Taiwan, which led
to large scale imports of PC‐compatibles. These factors led to boom in Indian PC‐
compatible market, which in turn stimulated domestic ancillary industries like printed
circuit boards (PCBs), floppy drives, power supply, and printers (Radhakrishnan, 2003).
Table‐2
Electronic Production in India, 1981–1990
Production in $ million (percentage share)
Growth rate
(%)
1981
1985
1990
Consumer Electronics
285
857
1698
26.2
(29.54)
(40.02)
(31.06)
Industrial Electronics
183
327
802
19.6
(18.96)
(15.25)
(14.68)
Computers
34
125
584
38.9
(3.52)
(5.85)
(10.69)
Communication & Broadcasting Equipment
177
308
932
32.2
(18.37)
(14.39)
(17.05)
Strategic Electronics
80
159
326
16.7
(8.25)
(7.43)
(5.96)
Electronic Components
199
332
895
21.1
(20.64)
(15.48)
(16.37)
Total Electronic Hardware
958
2108
5237
24.2
(99.27)
(98.43)
(95.82)
Domestic Software
0.26
6
114
105.8
(0.03)
(0.29)
(2.09)
Software for Exports
7
28
114
34.3
(0.70)
(1.28)
(2.09)
Total Computer Software
7
34
229
43.6
(0.73)
(1.57)
(4.18)
Total Electronic Production
965
2142
5465
24.6
(100)
(100)
(100)
Note: Growth rate has been obtained from running semi logarithmic regression of the form, logy=a+bt on
annual production from 1981 to 1990, where y=production, t=time, a, b are constants. Growth rate =
{antilog (b)‐1]}*100; Percentage shares are provided in parenthesis.
Source: Based on two sources of Department of Electronics, Government of India, New Delhi: (i) Electronics
Information & Planning, November 1991; (ii) Guide to Electronics Industry in India 1999.
Sector
During 1987–1990, Indian government established several other institutions to support
the growth of the IST industry (Kokhova and Sukharev, 2001). Software exports by
companies registered with Department of Electronics has been provided with export
promotion benefits as granted to manufactureed exports. The clients of Indian software
companies were provided with insurance protection against malpractices and software
companies were granted access to export shipment credit and credit guarantees. The
13
Electronics and Computer Software Export Promotion Council (ESC) was established in
1988 as electronics and IT trade facilitation organization. In March 1988, Government of
India established an R&D institution, National Centre for Software Technology (NCST)
(presently known as Centre for Development of Advanced Computing), meant fro
designing, developing and deploying of advanced IT based solutions. In the wake of the
US government’s refusal to sell supercomputers to India, the NCST has played an
important role in developing indigenous technology for supercomputers and has
introduced a range of high performance parallel computers, known as the PARAM series
of supercomputers. These computers were later exported to several countries like Russia,
Canada, Germany and Singapore. In 1990 the government adopted the scheme of
Software Technology Parks (STPs) of India to leverage from cluster benefits and
providing software companies with abundance of requisite infrastructure. India’s
adoption of satellite‐based telecommunication has in fact significantly improved the
speed of interaction between Indian software companies and their overseas subsidiaries
and clients. In this period venture capital funding for software companies became
available, which has helped many Indian software companies to come into existence. To
further boost software exports, profits earned from software and services exports were
totally exempted from taxation.
The differential performance of computer hardware and software industry both being
two sides of the same coin should not surprise anyone. It is an example of how one
segment of an industry that has benefited from efficient synergies among different
innovation agents in a NIS whereas another is fighting for survival due to inefficient
synergies. The government policy towards the exports and development of computer
software was more systematic, dynamic and outward‐looking whereas that towards
hardware was marked by frequently changing and more of inward‐looking protectionist
strategy since 1970s. In post‐Independent India, the policy regime towards computer can
be divided into five phases—outward‐looking to foreign investment and imports during
1950–72, became more restrictive over 1972–84, partially liberalized during 1984–87,
reversal of partial liberalization specifically with regard to imports in 1987–1990 and
moved into a highly liberalized and outward‐looking phase from 1991 onwards. The
changing direction of policy in the 1980s led to more confused firm‐level strategies in the
hardware industry. Since the hardware industry in India has a high import dependency
due to lack of local availability of inputs and raw material, the imposition of high import
duties had adversely affected the industry. The Indian hardware firms were devoid of
seriousness of a government‐backed cluster approach as in the case of software through
software technology parks and thus were suffering from lack of suitable infrastructure.
Although, the policy notifications for Electronic Hardware Technology Park (EHTP)
were issued during 1992–1993, but government seriousness for hardware segment was
14
lost in “a general hostile policy environment and the impact of wrongly balanced
structure of the original version of EHTP”. 4 The unfavourable domestic market condition
like low PC‐intensity has not led these firms to achieve the economies of scale so
important to the industry. There are also firm‐specific inadequacies which have affected
the competitiveness of Indian hardware industry in the global markets. Indian hardware
companies although had shown their ability to design a new product like supercomputer
but always they are late relative to global developments. They could not create a strong
brand name for their products due to low quality and low level of innovation.
The growth of Indian IST industry in 1980s is also related to the overall strategy of
government to build industrial capacity in the country during the period 1950s–1980s
with targeted public sector investment in skill, infrastructure, and institutions. In various
Five Year Plan documents, the policy has laid special emphasis on expanding facilities
for post‐graduate studies and research in engineering, technological, and management
education besides improving facilities for diploma or certificate courses for training
supervisory personnel. The basic objective was to create a skilled workforce to support
the economic development of post‐Independent India. The Central Government has
established a number of higher technological institutes like five IITs (Indian Institute of
Technology) at Kharagpur (1951), Mumbai (1958), Chennai (1959), Kanpur (1959), and
Delhi (1961); IIMs (Indian Institute of Management) at Ahmedabad (1961), Bangalore
(1973), Calcutta (1961); in addition a number of technological institutions (engineering
colleges and polytechnics) and universities were being added to the national educational
system. Between 1950–51 and 1981 the number has increased from 49 with an annual
capacity of 4120 students to 171 with a capacity of 34835 students in the case of degree
courses and 84 with a capacity of 5900 students to 363 with a capacity of 61114 students
in the case of diploma courses. The increased availability of these specialized institutions
has led Indian households to send their children for higher specialized and technical
education. The overall enrollment ratio for secondary school education has gone up from
5.4 per cent in 1950–51 to 17.3 per cent in 1980–81 and the number of engineering
graduates and diploma holders jumped between the same years from 4680 to 53499. All
these have contributed to the major development of skills and education in India, which
have greatly helped the growth of Indian IST industry (Abraham and Sharma, 2005).
In the meantime, the policy started laying emphasis on directly promoting computer
education in the country. The Department of Electronics (DoE) in collaboration with
4
Basic Background Report (BR‐2) for National Task Force on Information Technology and
Software Development, Government of India, 8th August 1998, available at http://it‐
taskforce.nic.in/bbr2/bbr2‐2.htm.
15
Department of Education started a pilot initiative for introducing computer literacy and
studies in about 250 selected secondary/higher secondary schools in 1984–85 and later
1700 more schools were covered under this progamme. The shortage of specialized skill
for the growth of IST industry was felt in the 1980s and the DoE took the initiative to
identify institutions that could undertake the bachelor and post graduate courses in
computer applications in early 1980s. A number of new courses such as Master of
Computer Applications (MCA), Diploma in Computer Applications (DCA), Bachelor of
Engineering or Technology (BE/B.Tech.) in computer engineering and science were
introduced in universities, IITs, engineering colleges. The large demand of households
for IT and computer education led to proliferation of a number of private players like
NIIT (1981), Aptech Ltd. (1986), etc., and which in turn trained a very large number of
professionals in the country. Most importantly, Indian households started sending a
group of their technical manpower to work overseas in countries like USA. Later on these
expatriate Indian computer professionals turned into entrepreneurs strongly linking
Indian software industry with global software industry and generating knowledge
spillovers from the Silicon Valley to India.
The 1990s—the third stage of the evolution of Indian IST industry—saw significant
transformation in the structure of Indian electronic industry. This was a period of rapid
growth period for Indian software industry—domestic software and software exports
respectively grew at 38 per cent and 51 per cent over 1991–2000 (Table‐3). As a result of
this phenomenal growth, computer software has emerged as largest component of Indian
electronic industry. Its share has gone up from 5.7 per cent in 1991 to 53.7 per cent in
2001. On the contrary, the growth of computer hardware suffered a serious setback—its
growth dropped by seven times from 38.9 per cent in 1981–1990 to just 5.4 per cent in
1991–2000.
The growth of Indian IST industries in 1990s also reveals the importance of institutions as
a determining factor in the evolution of an industry. The development of Indian capital
market has favourably affected the industry and a large number of Indian IST firms
raised their resource requirement via this route of financing. Over 1993–94 to 2005–06
Indian electronics and software firms went for as many as 320 capital issues (both public
and rights issues) raising over Rs. 126 billion worth of investment from Indian capital
markets (Table‐4). The emergence of software technology parks (STP) all over the
country as institutions with excellent infrastructure and fiscal benefits have led to
tremendous growth of software exports from India. The share of STP towards total
software exports from India has increased from mere 3.3 per cent in 1991–92 to a
staggering 67.7 per cent in 1999–00 (Table‐5).
16
Table‐3
Electronic Production in India, 1991–2000
Sector
Consumer Electronics
Industrial Electronics
Computers
Communication & Broadcasting Equipment
Strategic Electronics
Electronic Components
Total Electronic Hardware
Domestic Software
Software for Exports
Total Computer Software
Total Electronic Production
Production in $ million (percentage share)
1991
1995
2000
1333
1715
2644
(29.5)
(26.1)
(17.8)
624
790
883
(13.8)
(12.0)
(6.0)
425
622
745
(9.4)
(9.5)
(5.0)
853
935
990
(18.9)
(14.2)
(6.7)
229
239
385
(5.1)
(3.6)
(2.6)
794
1064
1224
(17.6)
(16.2)
(8.2)
4258
5364
6871
(94.3)
(81.7)
(46.3)
110
478
1958
(2.4)
(7.3)
(13.2)
145
725
6008
(3.2)
(11.0)
(40.5)
256
1203
7966
(5.7)
(18.3)
(53.7)
4514
6567
14838
(100)
(100)
(100)
Growth rate
(%)
9.4
5.2
5.4
0.2
10.2
5.2
5.9
38.2
51.2
46.5
14.2
Note: Same as Table‐1.
Source: Same as Table‐1 and Ministry of Communications & Information Technology (2006) Information
Technology Annual Report 2005–06, Department of Information Technology, Government of India.
Table‐4
Resources Raised by Electronics and Information Technology Firms from Indian Capital
Market, in Rs. crore.
Electronics
Industry
No.
70
7
Value
828
746
Information Technology
No.
Value
22
409
30
298
1993–94
1994–95
1995–96
1997–98
3
62
1
1998–99
4
204
5
1999–00
3
213
36
2000–01
4
69
89
2001–02
0
0
6
2002–03
0
0
3
2003–04
4
247
9
2004–05
2
61
5
2005–06
2
54
15
All above years
99
2484
221
Note: The number includes both public issue and rights issue.
Source: SEBI (2007), Handbook of Statistics on the Indian Securities Market 2006, pp.24–25.
17
9
47
1547
804
38
227
804
5095
902
10180
Table‐5
Software Exports by Software Technology Parks of India, 1991–92 to 1999–00
Name of STP
Software Export (Rs. Crore)
1991–92 1992–93 1993–94 1994–95 1995–96 1996–97 1997–98 1998–99 1999–00
16.1
22.9
56.6
126.4
405.5
913.7
1650.0 2888.1
4321
0.3
0.5
1.1
3.8
53.3
89
7.6
15.9
27.4
96.1
150
0.0
0.9
0.0
1.2
1.5
3.8
6.2
13.3
27
0.2
4.6
9.8
24.7
60.4
133.2
274.0
573.5
1059
161.0
393.9
747.6
1890
5.4
8.0
6.1
3.7
15
0.1
23.6
45.7
82.1
200.0
415.8
750.0
1346.3
2450
5.4
15
0.2
0.5
1.6
7.4
41.5
120.5
251.9
381.2
572
147.5
962
1.2
1.7
2.3
3.6
8.0
25.0
44.0
57
16.6
53.59
115.77 244.49 726.62 1779.86 3388.22 6300.04 11607
508
675
1020
1535
2550
3700
6500
10940
17150
Bangalore
Bhubaneswar
Calcutta
Gandhinagar
Hyderabad
Chennai
Jaipur
Noida
Mohali
Pune
Navi Mumbai
Thiruvananthapuram
Total STP Exports
Total Software Exports
from India
STP as a per cent of total
3.3
7.9
11.4
15.9
28.5
48.1
52.1
57.6
67.7
software exports from
India
Source: Based on (i) Electronics and Computer Software Export Promotion Council (2000) Statistical Year Book
2000, New Delhi; (ii) Guide to Electronics Industry in India, various years, Data Bank and Information
Division, Department of Information Technology; (iii) Annual Report (various years), Department of
Information Technology, Ministry of Communications & Information Technology, New Delhi.
In the 1990s the policy regime governing Indian industries including IST industry has
become more globalized and liberalized with progressive liberalization of industrial,
foreign investment, technology and trade policies that have taken place since the issue of
new industrial policy statement on July 24, 1991. The existing liberalized policy
environment for the Indian electronics and IT industry is characterized by the following
features—abolition of industrial licensing requirement except electronic aerospace and
defence equipment which is still under reserved for public sector companies; automatic
approval for foreign technology agreement and foreign equity up to 100 per cent; zero
custom duties on computer software as well as for inputs, raw materials and capital
goods imports for manufacture of electronic components and goods, imports of
computer parts such as microprocessors, hard disc drives, floppy disc drives, CD ROM
drives, DVD drives, USB flash memory and combo‐drives; 12 per cent excise duty on
imports of finished computers; income tax exemption on export profits earned by firms
that are Export Oriented or are based in electronics hardware technology park (EHTP),
STPs and Special Economic Zones (SEZs); 60 per cent depreciation on computers; and a
weighted deduction of 150 per cent on expenditure borne for the purposes of scientific,
social or statistical research. The exiting policy related to hardware segment of IST
18
industry is quite a contrast to the policy pursued during 1987–1995. Apart from
instituting liberal trade measures for hardware segment, various policy notifications in
the late 1990s made the EHTP as duty free area for hardware manufacture.
These liberal policy measures led to a continuous growth momentum of the IST industry
during 2001–2005. In spite of the strong negative impact of the US economic slow‐down
and 9/11 World Trade Centre terrorist attacks, the software segment continued its high
growth performance at 31.5 per cent in 2001–05, which is of course lower than the growth
rate of 46.5 per cent in 1991–2000 (Table‐6). The favourable policies towards hardware
segment led to a reversal of growth set backs received during 1991–00 and this segment
achieved an impressive growth rate of 35.3 per cent in 2001–05. Not withstanding the
Table‐6
Electronic Production in India, 2001–2005
Sector
Consumer Electronics
Industrial Electronics
Computers
Communication & Broadcast
Equipment
Strategic Electronics
Electronic Components
Total Electronic Hardware
Domestic Software
Software for Exports
Total Computer Software
Total Electronic Production
2001
2607
(16.0)
949
(5.8)
746
(4.6)
943
(5.8)
371
(2.3)
1197
(7.4)
6814
(41.9)
2246
(13.8)
7206
(44.3)
9452
(58.1)
16266
(100)
Production in $ million
(percentage share)
2002
2003
2004
2794
3188
3641
(14.6)
(13.1)
(11.4)
1111
1284
1832
(5.8)
(5.3)
(5.7)
860
1417
1915
(4.5)
(5.8)
(6.0)
988
1106
1053
(5.2)
(4.5)
(3.3)
479
573
629
(2.5)
(2.4)
(2.0)
1340
1599
1920
(7.0)
(6.6)
(6.0)
7572
9167
10989
(39.7)
(37.7)
(34.3)
2469
3327
4524
(12.9)
(13.7)
(14.1)
9054
11807
16550
(47.4)
(48.6)
(51.6)
11523
15135
21074
(60.3)
(62.3)
(65.7)
19095
24301
32063
(100)
(100)
(100)
Growth rate
(%)
2005
4082
(10.3)
2041
(5.1)
2268
(5.7)
1179
(3.0)
680
(1.7)
1995
(5.0)
12245
(30.9)
5669
(14.3)
21769
(54.9)
27438
(69.1)
39683
(100)
12.3
22.5
35.3
5.2
16.0
14.8
16.7
27.8
32.5
31.5
25.9
Note: Same as Table‐1.
Source: Ministry of Communications & Information Technology (2006) Information Technology Annual
Report 2005–06, Department of Information Technology, Government of India.
growth reversal, the local capability for a globally competitive hardware industry in
India still continued to be low. The industry is largely import‐led since capability for
manufacturing components locally is either limited or has higher cost with low quality.
19
Inadequate R&D investment and skill upgradation have negated India’s skilled
manpower advantage to design world‐class state‐of‐the‐art hardware products.
Therefore, the growth of Indian computer industry is actually led by screwdriver
assembly operations of imported components rather by any major component that is
indigenous.
3.2. Emergence of Indian IST OFDI
The first known case of Indian IST OFDI can be traced back to an Indian computer
hardware company named Hindustan Computers Limited (HCL) 5. On 10th December
1979, HCL entered into a joint venture with Far East Computers Limited to manufacture
micro‐ and mini‐computers in Singapore. This was the post‐IBM period in the evolution
of Indian IST industry when a number of Indian companies came into being as a
response to the import substituting policy being followed towards computer hardware
segment. HCL was among the few Indian private players to locally produce indigenous
micro‐computer in 1978 and that also at the same time as Apple and 3 years before IBMʹs
PC. This first mover advantage of HCL in computer hardware industry led to the first
ever internationalization drive by an Indian IST company. HCL was followed by two
other oldest Indian IST companies to undertake OFDI for foraying into overseas market.
DCM Data Systems Services Private Ltd. entered into an overseas joint venture for
marketing software in Baharain on 5th May 1983 and Hinditron Computers System
Private Ltd. established a wholly‐owned subsidiary in USA on 10th January 1983. These
three Indian companies were at their pinnacle in the late 1970s and 1980s with strong
capability to manufacture microprocessor‐based computers and required computer
software. Given these capabilities it is no surprise that they led the internationalization of
Indian IST industry in that period.
In the late 1980s, HCL Overseas Ltd. and Infosys Consultants Private Ltd. undertook one
OFDI project each directed at the USA. Both these projects were for development of
computer software. The real break in the trend of Indian IST OFDI took place in 1991
with an increasing number of Indian firms undertaking overseas investment project
compared to the past. In 1991 there are cases of three overseas joint ventures and two
overseas wholly‐owned subsidiaries undertaken by five Indian IST companies 6. The total
5
6
Author based on Indian Investment Centre (1998), Indian Joint Ventures & Wholly Owned
Subsidiaries Abroad Approved up to December 1995, New Delhi.
These outward investing companies are Computer Aided Learning Systems Private Ltd. KEI
Systems P. Ltd. each undertaking a JV in Russia, Hinditron Services and International Computer
Ltd. each establishing a wholly owned subsidiary in USA, and Tata Consultancy Services
contd...
20
OFDI approvals for Indian IST increased to seven in 1992—four joint ventures and three
wholly‐owned subsidiaries. In 1996, the approved IST OFDI was estimated to be 46
comprising 9 JV and 37 wholly‐owned subsidiaries. The increasing tendency of Indian
IST firms to have complete control over their overseas operation is similar to the
behaviour of Indian manufacturing firms in 1990s 7 (Pradhan, 2005, 2007). As Indian
hardware companies started loosing their competitive advantages because of their
inability to innovate according to fast changing demand conditions and uncertainty in
public policy in India as well as abroad the cases of OFDI by hardware companies went
into oblivion in late 1990s. The Indian IST OFDI was largely led by Indian software
companies that benefited from a suitable NIS system maturing in India. The
liberalization of OFDI policy in 1990s and early 2010s has facilitated the emergence of
Indian IST multinationals by relaxing policy led barriers to undertake trans‐border
investment activities (Pradhan, 2007).
4. Indian IST Multinationals: Main Features
In this section, I present the broad statistics related to Indian IST multinationals based on
a unique dataset that has been constructed at the Institute for Studies in Industrial
Development, New Delhi. This dataset contains information on a total of 165 Indian IST
multinationals which in turn have a total of 645 overseas subsidiaries, 9 overseas joint
ventures and 7 overseas associate companies (in which parent firms own a substantial
equity interest). These subsidiaries and joint ventures are in operation presently. This
dataset has been constructed from two sources—(i) annual reports of companies listed
with Indian stock market and available at the EDIFAR (Electronic Data Information
Filing and Retrieval System) of the Securities and Exchange Board of India 8; (ii) websites
of unlisted companies accessed based on the web addresses obtained from the
NASSCOM (National Association of Software and Services Companies) Directory, 2005.
As per the regulatory requirement, Section 212(1) of the Companies Act 1956, Indian
companies investing abroad should attach the balance sheet, profit and loss accounts of
their overseas subsidiaries to the accounts of the parent company. However, this legal
provision is hardly implemented in India and hence it is rare to find Indian companies
adhering to it. Ministry of Company Affairs, Government of India, has been liberally
granting exemption to most of the Indian companies having operating subsidiaries from
7
8
entering into a JV in USA.
Author based on Indian Investment Centre (1998), Indian Joint Ventures & Wholly Owned
Subsidiaries Abroad Approved during the year 1996, New Delhi.
This can be access at http://sebiedifar.nic.in/sebi_doc_pub.asp?value=ar
21
complying with this provision. As a result the constructed dataset could only collect
information on the name of overseas subsidiaries, country of incorporation, and the
percentage of ownership interest. Majority of available annual reports related to the fiscal
year 2005–2006 or the date of searching companies’ websites belong to 2006 (cover 610
Indian IST multinationals); with a few reports confined to 2004–2005 (cover 47 Indian IST
multinationals) and two reports are related to the year 2003. In view of the manual
construction of the dataset with different sources, the available information is obviously
not comprehensive and sketchy in nature. However, this dataset covering a large number
of Indian IST multinationals still can provide some broad indications of the phenomena
under study.
4.1. Geographical Composition
The geographical distribution of the presence of Indian IST multinationals through their
overseas subsidiaries, joint ventures and associate companies is presented in Figure‐2
and Table‐7. Two North American countries, USA and Canada, host 241 overseas
ventures of Indian IST multinationals, accounting for 37.2 per cent of total overseas
ventures. USA being the largest global market for software services has emerged as the
top host of Indian IST multinationals with 226 overseas ventures. The large concentration
of Indian IST multinationals in USA is also due to the presence of successful Indian
immigrants and professionals related to the IT industry who have played a crucial role in
development of Indian IST industry by providing overseas networks, contacts, skills and
reverse brain drain.
Although India has risen as a software services player largely dependent on the USA, of
late Indian IST companies are making consistent efforts to decrease their dependence on
a single country. After being hit hard by the US slow‐down in 2001, these companies
have been aggressively foraying into Europe, the second largest market accounting for
global IT services. As a result European countries emerged as the second largest host
region to Indian IST multinationals. Within European software markets UK is the largest
in size accounting for over 21 per cent of total European spending on computer services 9.
Apart from a growing market size, India’s long history of economic and cultural ties with
UK has also positively affected the location of Indian IST multinationals. UK turns out to
be the largest European host with 84 overseas ventures of Indian IST multinationals.
Germany and the Netherlands are other two most attractive European destinations for
Indian IST firms respectively accounting for 38 and 19 overseas ventures.
9
UK Trade & Investment (2005), ‘Software & Computer Services Opportunities in the UK’,
February 22.
22
Figure‐2
Overseas Subsidiaries, Joint Ventures and Associate Companies of Indian IST Multinationals
Europe
164 (24.8%)
North America
246 (37.2%)
Asia
144 (21.8%)
Middle East
31 (4.7%)
The Caribbean
21 (3.2%)
Africa
17 (2.6%)
South America
15 (2.3%)
The Oceania
23 (3.5%)
Table‐7
Geographical Distribution of Overseas Subsidiaries, Joint Ventures and Associate Companies
of Indian IST Multinationals, as in 2006
Region/Countries
Developed countries
European Union
Austria
Belgium
Denmark
France
Germany
Ireland
Italy
Luxembourg
Netherlands
Portugal
Spain
Sweden
UK
Other Western Europe
Switzerland
North America
Canada
USA
Other Developed
Countries
Australia
Japan
Subsidiary
445
175
4
6
2
6
37
7
3
2
19
1
1
4
83
4
4
231
11
220
34
Number
Joint Venture Associate Company
5
5
2
4
1
3
1
68.8
26.8
0.6
0.9
0.3
0.9
5.7
1.1
0.5
0.3
2.9
0.2
0.2
0.6
12.7
0.6
0.6
36.0
1.8
34.2
5.3
1
20
12
3.0
1.8
1
1
3
3
20
11
23
Per cent
Total
455
177
4
6
2
6
38
7
3
2
19
1
1
4
84
4
4
238
12
226
35
Region/Countries
Subsidiary
3
199
16
12
4
25
New Zealand
Developing Countries
Africa
Mauritius
South Africa
Latin America and the
Caribbean
Argentina
2
Bermuda
5
Brazil
2
British Virgin Island
1
Cayman Island
1
Chile
9
Mexico
3
Uruguay
2
Asia and the Pacific
158
Bahrain
5
Bangladesh
1
China
17
Cyprus
1
Hong Kong
11
Indonesia
3
Korea
2
Malaysia
20
Oman
3
Philippines
2
Saudi Arabia
1
Singapore
60
Sri Lanka
1
Taiwan
1
Thailand
10
UAE
19
Vietnam
1
Central and Eastern Europe
2
Czech Republic
2
All Region
645
Source: Based on Appendix Table‐A1.
Number
Joint Venture Associate Company
4
2
1
1
4
1
1
1
1
2
9
7
Per cent
Total
3
205
17
12
5
25
0.5
31.0
2.6
1.8
0.8
3.8
2
5
2
1
1
9
3
2
163
5
1
18
1
11
3
2
21
3
2
1
61
1
1
10
21
1
2
2
661
0.3
0.8
0.3
0.2
0.2
1.4
0.5
0.3
24.7
0.8
0.2
2.7
0.2
1.7
0.5
0.3
3.2
0.5
0.3
0.2
9.2
0.2
0.2
1.5
3.2
0.2
0.3
0.3
100
Asian countries emerged as the third largest host region to Indian IST multinationals.
They accounted for 144 overseas ventures of these multinationals (about 21.8 per cent of
the total). Singapore with 61 overseas ventures, China (including Hong Kong) with 29,
Malaysia and UAE with 21 each, Japan with 11, Thailand with 10 are important Asian
host countries. Singapore has traditionally been the focus of Indian IST multinationals
since 1989 with increasing number of Indian software firms selling their products and
services. The booming financial sector in Singapore with user‐friendly financial
environment based on strong physical infrastructure and telecommunications
24
capabilities has generated a large demand for IT solutions related to financial and
telecom sector, thus, attracting many Indian IST multinationals. The faster growing
Chinese economy is the second most attractive country in Asia.
The share of other regions in attracting overseas ventures of Indian IST multinationals is
quite low. Middle East countries could attract only about 4.7 per cent of total overseas
ventures followed by Oceania with 3.5 per cent, Caribbean with 3.2 per cent, Africa with
2.6 per cent, and South America with 2.3 per cent. Another aspect of Indian IST
multinationals is that their overseas activities are related to the developmental status of
host countries. Developed countries that tend to spent large amounts on IT have claimed
68.7 per cent of the total overseas ventures undertaken by IST multinationals whereas
developing countries have attracted just 31 per cent.
4.2. Ownership Pattern
The Indian IST multinationals are observed to have majority equity ownership in their
overseas ventures. Wholly‐owned subsidiaries account for about as high as 89 per cent of
total overseas ventures (Table‐8). The behaviour of Indian IST multinationals to have full
control over their overseas operations can be explained by the nature of software services
that they offer. Indian IST multinationals possess their competitive advantages in their
global service delivery models based on an efficient interaction between their onshore
and offshore development centres. Many Indian software firms have already opened
their offshore development centre in overseas markets to achieve closer customer
relationship, which is a critical component of a competitive service delivery model.
Unless they possess majority control over their overseas subsidiaries, an efficient and
effective service delivery system that strongly protects the customer data and may not be
achieved. As most of the services offered by Indian firms involve trade and service
secrecy and protected data, sharing ownership of overseas ventures with other parties is
not a secure mode of operation. Majority‐owned offshore development subsidiaries thus
offer an efficient form of overseas expansion that can maximize the benefits from their
global service delivery models.
25
Table‐ 8
Ownership Patterns of Indian IST Multinationals
Ownership
Interest (%)
Subsidiaries
Number
Joint ventures
Associate
Companies
1
1
1
4%
20%
26%
40%
1
43%
1
49%
50%
1
51%
11
52%
1
53%
1
58%
2
59%
3
60%
1
64%
1
70%
1
72%
1
75%
2
76%
2
80%
2
82%
1
90%
2
91%
1
98%
2
99%
6
100%
442
Total
485
Source: Based on Appendix Table‐A1.
2
1
3
2
6
5
Per cent
Cumulative per
cent
0.20
0.20
0.20
0.20
0.20
0.40
1.01
2.22
0.20
0.20
0.40
0.60
0.60
0.20
0.20
0.20
0.40
0.40
0.40
0.20
0.40
0.20
0.40
1.21
89.11
100
0.2
0.4
0.6
0.8
1.0
1.4
2.4
4.6
4.8
5.0
5.4
6.0
6.7
6.9
7.1
7.3
7.7
8.1
8.5
8.7
9.1
9.3
9.7
10.9
100.0
Total
1
1
1
1
1
2
5
11
1
1
2
3
3
1
1
1
2
2
2
1
2
1
2
6
442
496
4.3. India’s Leading IST Multinationals
Table‐9 presents India’s sixty leading IST multinationals by the number of overseas
ventures. These sixty multinationals, which constitute about 36 per cent of the total
number of Indian IST multinationals at 165, account for as much as 72.6 per cent of the
total number of overseas affiliates of Indian IST industry operating in 2005–06. Clearly
there is a high firm‐level concentration among outward investing parent firms by the
number of overseas subsidiaries. Tata Consultancy Services (TCS) with 47 overseas
affiliates emerged as the top Indian IST multinational, accounting for over 7 per cent of
the total overseas affiliations of the Indian IST industry. About 48.4 per cent of the total
assets and 57.5 per cent of the total sales of the parent company (i.e. TCS) are accounted
for by its foreign subsidiaries in 2005–06 (Table‐10). H C L Technologies Ltd. with 31
overseas affiliates, Cambridge Solutions Ltd. with 19 overseas affiliates and Teledata
26
Informatics Ltd. with 15 overseas affiliates are the next three leading Indian IST
multinationals. The foreign assets and foreign sales of these multinational firms
constitute as high as 73.3 and 65.3 per cent of the total assets and sales in the case of
H C L Technologies, 53 and 41.1 per cent in the case of Cambridge Solutions, 38.3 and
46.7 per cent in the case of Teledata Informatics. Taking the number of overseas affiliates
down, the fifth ranking IST multinationals are Mphasis Ltd. and Wipro Ltd. with 14
overseas affiliates each, followed by N I I T Technologies Ltd. and R Systems
International Ltd. with 12 overseas affiliates each, and Firstsource Solutions Ltd., G T L
Ltd. and Megasoft Ltd. with 10 overseas affiliates each. In 2005–06, 39 per cent of the
assets of eleven leading Indian IST multinationals are based in foreign countries and
about 40 per cent of their sales are from their overseas subsidiaries (Table‐10).
Table‐9
Top Sixty Indian IST Multinationals by Number of Overseas Ventures
Name of Indian Parent Firm
Tata Consultancy Services Ltd.
H C L Technologies Ltd.
Cambridge Solutions Ltd.
Teledata Informatics Ltd.
Mphasis Ltd.
Wipro Ltd.
N I I T Technologies Ltd.
R Systems International Ltd.
Firstsource Solutions Ltd.
G T L Ltd.
Megasoft Ltd.
N I I T Ltd.
Trigyn Technologies Ltd.
3I Infotech Ltd.
Four Soft Ltd.
I‐Flex Solutions Ltd.
Igate Global Solutions Ltd.
Infotech Enterprises Ltd.
Polaris Software Lab Ltd.
Aurionpro Solutions Ltd.
ISGN Technologies Ltd
Network Systems & Technologies (P) Ltd
Nucleus Software Exports Ltd.
Patni Computer Systems Ltd.
Rolta India Ltd.
Satyam Computer Services Ltd.
BPL Telecom Pvt. Ltd.
Cybertech Systems & Software Ltd.
Hexaware Technologies Ltd.
Hinduja T M T Ltd.
Infinite Computer Solutions (India) Pvt
K P I T Cummins Infosystems Ltd.
Number of Overseas Ventures
47
31
19
15
14
14
12
12
10
10
10
9
9
8
8
8
8
8
8
7
7
7
7
7
7
7
6
6
6
6
6
6
27
Per cent
7.11
4.69
2.87
2.27
2.12
2.12
1.82
1.82
1.51
1.51
1.51
1.36
1.36
1.21
1.21
1.21
1.21
1.21
1.21
1.06
1.06
1.06
1.06
1.06
1.06
1.06
0.91
0.91
0.91
0.91
0.91
0.91
Cumulative per cent
7.1
11.8
14.7
16.9
19.1
21.2
23.0
24.8
26.3
27.8
29.4
30.7
32.1
33.3
34.5
35.7
36.9
38.1
39.3
40.4
41.5
42.5
43.6
44.6
45.7
46.8
47.7
48.6
49.5
50.4
51.3
52.2
Name of Indian Parent Firm
Mascon Global Ltd.
Mastek Ltd.
Melstar Information Technologies Ltd.
Tech Mahindra Ltd.
Zensar Technologies Ltd.
Aptech Ltd.
Cranes Software Intl. Ltd.
Helios & Matheson Information Technology
Insoft.com Pvt Ltd
Java Softech Private Limited
Northgate Technologies Ltd.
Orient Information Technology Ltd.
Panoramic Universal Ltd.
Quintegra Solutions Ltd.
Ramco Systems Ltd.
Tata Technologies Ltd.
Thirdware Solution Ltd.
B 2 B Software Technologies Ltd.
California Software Co. Ltd.
Geodesic Information Systems Ltd.
IBS Software Services (P) Ltd
Infosys Technologies Ltd.
Kale Consultants Ltd.
Olive e‐Business Pvt. Ltd.
Ontrack Systems Ltd.
SunTec Business Solutions Pvt. Ltd.
Synergy Log‐In Systems Ltd.
Unisoft Infotech Pvt Ltd.
Total IST Multinationals
Source: Based on Appendix Table‐A1.
Number of Overseas Ventures
6
6
6
6
6
5
5
5
5
5
5
5
5
5
5
5
5
4
4
4
4
4
4
4
4
4
4
4
661
Per cent
0.91
0.91
0.91
0.91
0.91
0.76
0.76
0.76
0.76
0.76
0.76
0.76
0.76
0.76
0.76
0.76
0.76
0.61
0.61
0.61
0.61
0.61
0.61
0.61
0.61
0.61
0.61
0.61
100.00
Cumulative per cent
53.1
54.0
54.9
55.9
56.8
57.5
58.3
59.0
59.8
60.6
61.3
62.1
62.8
63.6
64.4
65.1
65.9
66.5
67.1
67.7
68.3
68.9
69.5
70.2
70.8
71.4
72.0
72.6
Table‐10
Foreign Assets and Sales of Top Eleven Indian IST Multinationals, 2005–06
Name of Indian Parent
Year
Revenue (Rs. crore)
Total
Foreign
FPT*
Tata Consultancy Services Ltd.
13252
7617
57.5
2005–06
H C L Technologies Ltd.
4572
2986
65.3
2005–06
Cambridge Solutions Ltd.
1181
485
41.1
2005–06
Teledata Informatics Ltd.
1038
485
46.7
2005–06
Mphasis Ltd.
940
638
67.9
2005–06
Wipro Ltd.
10603
211
2.0
2005–06
N I I T Technologies Ltd.
608
534
87.9
2005–06
R Systems International Ltd.
157
95
60.1
2005
Firstsource Solutions Ltd.
550
176
32.0
2005–06
G T L Ltd.
980
429
43.8
2005–06
Megasoft Ltd.
103
9.60
9.4
115
60
52.1
2005
All above companies
22484
8785
39
33996
13716
40
Note: * FPT: Foreign as percentage of Total; Rupee 1 crore = Rupee 10 million; total figure is the consolidated value
(i.e. parent, Indian subsidiaries and foreign subsidiaries) while foreign is the value of foreign subsidiaries.
Source: Based on annual reports of individual companies.
Gross Assets (Rs. crore)
Total
Foreign
FPT*
6975
3373
48.4
4024
2951
73.3
824
437
53.1
1142
437
38.3
844
744
88.1
7979
552
6.9
498
255
51.3
95
27
28.7
28
4.4. Firm‐specific Characteristics of Indian IST Multinationals
Earlier studies on Indian manufacturing industry such as Lall (1986) and Pradhan (2004)
suggest that outward investing Indian firms constitute a separate group as compared to
other firms not performing such investment activities 10. Whilst Lall (1986) found outward
investing firms to be only large‐sized, export oriented and dependent on imports of raw
materials, Pradhan (2004), based on relatively a large sample and for a most recent
period, observed them to be relatively older, large‐sized, technology‐intensive (in‐house
R&D as well as imports of disembodied technology), productive, export‐oriented and to
have strong dependent on managerial skills (proxied by residual profitability), selling
activities and liberalization of the policy regime. How do Indian IST multinationals differ
from other Indian IST firms that are not engaged in overseas investment activities?
Table‐11 presents an explorative comparative picture of Indian IST firms with and
without overseas subsidiaries on six selected firm‐level characteristics for the year 2005.
Except advertising intensity, overseas investing IST firms on an average possess higher
values for indicators like firm age, size, R&D intensity and export intensity than IST firms
without cross‐border investment. The difference is quite substantial in the case of firm
size as outward investing firms turn out to be more than eight‐times in size than non‐
outward investing firms. Outward investing firms are observed to have R&D and export‐
intensity nearly double those associated with non‐outward investors. Table‐12 provides
statistical content to the comparative analysis by implementing a non‐parametric test that
examines whether the groups of outward investing and non‐investing IST firms are from
the same population distribution or not. The results from the Wilcoxon rank‐sum test
suggest that Indian IST multinationals differs significantly from other Indian IST firms on
all the five firm‐specific characteristics such as firm size, age, R&D intensity, advertising
intensity and export intensity. The probability of non‐outward investing IST firms having
10
Based on a total sample of 162 compabies broken down into 138 firms without outward
investment and 24 firms with outward investment over 1977–78 to 1978–79, Lall (1986) through
Probit and Tobit analysis found that outward investing firms are intimately related with four
firm‐specific characteristics such as firm size, capital‐output ratio, export‐intensity and imports
of raw materials. Therefore, in the sample period outward investing activities of sample firms
were generally limited to a group of large, highly export‐oriented, and import dependent firms.
Pradhan (2004) is the most recent study based on a larger sample of 3951 manufacturing firms
with 26 346 observations of which 2 155 observations are of outward investing firms over the
period 1990–91 to 2000‐01. This study found that the outward investment intensity, measured as
stock of outward investment as a per cent of net worth, of Indian manufacturing firms was
significantly and positively related to firm size, firm age, R&D intensity, disembodied
technology imports intensity, selling cost intensity, managerial skills (proxied by residual
profitability), labour productivity, export‐intensity, and liberalization dummies.
29
higher values for these variables vis‐à‐vis IST firms with outward investment is less than
0.5, indicating that statistically former group of firms have lower values than the latter
category of firms. However, only in the case of firm size and export intensity that the
difference in probability is considerable. Therefore, the Indian IST multinationals are
relatively large‐sized and higher export oriented firms than other Indian IST firms. They
are also characterized by relatively higher values for R&D intensity, advertising activities
and firm age.
Table‐11
Difference between Indian IST firms with and without Overseas Subsidiaries, 2005
Indian IST Firms
Firms without overseas
Firms with overseas
All IST Firms
subsidiaries
subsidiaries
AGE (In number of years)
12.9
14.9
13.4
(306)
(111)
(417)
Size (In Rs. Crore)
44.5
365.1
158.6
(190)
(105)
(295)
RDINT (In %)
0.36
0.66
0.61
(190)
(105)
(295)
ADVINT (In %)
0.51
0.38
0.40
(190)
(105)
(295)
EXPOINT (In %)
46.85
83.65
77.00
(190)
(105)
(295)
Note: Number of firms in parenthesis; RDINT‐ R&D expenditure as a per cent of sales; ADVINT‐ Advertising
expenses as a per cent of sales; EXPOINT‐ Exports as a per cent of sales.
Source: Estimation based on a dataset constructed by merging the Prowess database of the CMIE and OFDI
data from Appendix Table‐A1.
Variables
Table‐12
Results from Wilcoxon Rank‐Sum (Mean‐Whitney) Test
Variable
Z Statistics
Level of Statistical
P{(IST firms without
Obs with firms
Significance
OFDI)> (IST firms with
Without OFDI With OFDI
(two‐tailed test)
OFDI)}
Firm Age
‐2.653
1%
0.415
306
111
Firm SIZE
‐6.649
1%
0.261
176
103
RDINT
‐3.132
1%
0.441
176
103
ADVINT
‐2.663
1%
0.410
176
103
EXPOINT
‐7.884
1%
0.223
176
103
Note: Estimated through STATA statistical package; P{(IST firms without OFDI)> (IST firms with OFDI)}
provides the probability that the values of the particular variable associated with Indian IST firms
without OFDI is larger than those values associated with Indian IST firms with OFDI.
Source: Same as Table‐11.
30
5. Case Study of Two Selected IST Multinationals
In this section a brief case study of India’s two largest IST multinationals, namely Tata
Consultancy Services and HCL Technologies Limited is presented. These firms are
among India’s oldest IST firms and an analysis of their emergence as multinational firms
can throw valuable light on the internalization process of Indian IST industry. The
growth of these two firms is found to be strongly related to the evolving NIS of India
from 1960s onwards. In 1960s, Indian households were pioneers in sending their
members for studying and working abroad. Most of these early immigrants have
generally returned to India after finishing their studies or after earning sufficient amount
to lead a decent life in India. Large Indian companies like Tata have successfully tapped
these home country bound foreign trained skilled and technical manpower. This is amply
clear in the case of TCS’ rise under the business model identified by Dr. Fakir Chand
Kohli. The proactive government policy in the domestic skill creation led to the
establishment of the Indian Institute of Technology (IIT) and various other technical
institutions. These institutions along with universities emerged as the knowledge core of
India’s manpower and entrepreneurship with ever rising number of students being sent
by Indian households. Availability of technical manpower at lower cost ensured that
companies like TCS and HCL leveraged for their growth and internationalization. The
government initiative for computerization of its different departments, banks, and
demand from research institutions for database services has provided early demand for
TCS. The government and research institutions also generated demand for indigenous
computers thus helping the growth of HCL. The role of foreign investment has been
instrumental in the growth of these two companies. Foreign investment in the form of
IBM has led to a process of skill creation and when IBM exited in 1978–79 it left a pool of
trained manpower in India. Some of these ex‐IBM skilled employees started their own
businesses, some others migrated to the US and others joined existing Indian companies
like TCS, HCL and DCM Data Systems. HCL came up to serve the domestic demand for
computers in the post IBM period. The adoption of favourable and stable government
policy on software exports, starting of satellite based communication system, software
technology parks, growing number of technical manpower in India, rising
entrepreneurship of the US‐based Indian professionals and technical manpower, etc.,
have all positively influenced the growth of TCS and the software part of HCL known as
HCL technologies. The case studies on these two Indian IST multinationals are provided
below.
31
5.1. Tata Consultancy Services Ltd.
The origin of Indian computer software industry can be traced back to the starting of
Tata Consultancy Services (TCS) by the Tata group way back in 1968 in Mumbai. The
company under the leadership of Dr. Faqir Chand Kohli, an electrical engineer trained at
the Massachusetts Institute of Technology, has identified the niche business of providing
IT solutions and started offering data processing services to various domestic companies
and institutions in 1969. TCS perceived emerging business opportunity in the demand for
computerization of information that is being led by increasing use of computers in the
public sector. Up to 1973, the focus of the company was largely on domestic market
tapping business opportunities like automation of inter‐branch reconciliation process of
nationalized banks under the Reserve Bank of India, computerization of the database of
the Mumbai telephone directory, computerization of the Income Tax department, etc 11.
After achieving a successful record of project execution in the domestic market, the
company entered into the global market in 1974. The company wanted to exploit its
limited capabilities by catering to overseas business opportunities and to benefit
technologically from interacting with overseas customers. The company bagged its first
international software assignment related to a health care system project from Burroughs,
the second largest hardware manufacturer after IBM that time 12. This happened in an
unplanned visit of Dr. Kohli to the Burroughs office in Detroit in 1974 where he was able
to convince the US hardware company to outsource their project from India. In the same
year TCS also got another overseas order from an Iranian electricity generation company
to provide software solution for stores and inventory control. 13 Subsequently, the
company’s exposure to the US market grown in the late 1970s with a successful
completion of a number of projects including archiving of crime database of the Detroit
City Police Department, maintenance and upgradation order from the Institutional
Group and Information Co (IGIC), etc. To expand further and to have active business
interactions with potential customers in the US market, TCS opened its first office in New
York City in 1979. This is the beginning of TCS’ overseas expansion mainly to ensure
service supports to its export activities.
With the arrival of New Computer Policy 1984, TCS and other software companies
benefited from easier access to foreign exchange and also were recognized as a separate
11
12
13
Economic Times (2002), ‘We’ve to tap the power of computers’, Interview of Dr. Faqir Chand
Kohli, March 22.
Economic Times (2002), ‘To a global village: F C Kohli is ETʹs lifetime achiever’ August 21.
Dataquest (2002), ‘THE HOT VERTICALS: The Great Indian Software Revolution’, December
23.
32
industry with simplified licensing and openness to foreign investment. Under this liberal
policy regime in late 1990s TCS continued its export‐led growth with rapid
diversification in its service profile from data entry to software development and
application maintenance. Its annual sales reached about $35 million in 1989, of which
exports constitute about 70 per cent 14. Geographically its export market became
diversified to cover about 35 countries from North America, Europe and the Middle East.
In 1989 TCS entered into a strategic alliance with Japanese trading company Nichimen
where the latter will market former company’s software in Japan. With rising number
and size of overseas orders and growing base of overseas customers, the company’s need
to be present overseas via its direct subsidiaries becomes irresistible as most of the
offshore contracts also have parts to be executed on‐site, nearer to the overseas
customers. As a result the company went for direct investment abroad and entered into
two joint ventures targeted at the US in 1991 and 1994 15.
The liberalization of policy regime towards OFDI, software industry, making of Software
Technology Parks with abundant infrastructure, satellite based high speed
communication systems, rising number of trained manpower and the global factor in the
form of Year 2000 (Y2K) problem have all positively contributed to the growth of Indian
software industry including TCS. In the early 1990s the export model of Indian software
companies has shifted from physical transfers (i.e. sending programmer onshore or
software on floppies) to an offshore‐onshore model facilitated by satellite communication
system and overseas presence thorough subsidiaries or marketing offices 16. The software
packages of Indian firms on accounting, banking, etc., which did not grow beyond India
in the 1980s, also started attracting international attention in 1990s. These favourable
factors led to the rapid organic growth of TCS. The resources (i.e. Rs. 5,000 crore) that it
has raised from the Indian capital market in 2004 have allowed it to grow inorganically
via acquisitions. The company became a billion dollar company in 2003 with a total of
24000 employees. By March 2006, company’s total revenue increased to above $2.5 billion
and its manpower jumped to 62832 (Table‐13). A significant part of this impressive
growth achieved by TCS has been contributed by establishment of a large number of
overseas subsidiaries that have played important role in directly contributing to the
parent’s global revenue and indirectly to the higher exports performance from India. As
14
15
16
Ken Takahashi (1989), ‘India group in Tokyo ‐ Tata Consultancy Service’, Newsbytes News
Network, August 01.
Author based on Indian Investment Centre (1998), Indian Joint Ventures & Wholly Owned
Subsidiaries Abroad Approved up to December 1995, New Delhi.
Dataquest (2002), ‘THE HOT VERTICALS: The Great Indian Software Revolution’, December
23.
33
noted earlier the overseas subsidiaries of the company have contributed above 57 per
cent of parent’s consolidated sales in 2005–06. The role of overseas subsidiaries in
promoting parent’s exports is also likely to be quite substantial. Without an onshore
presence through overseas subsidiaries, TCS would not have achieved such a dramatic
growth performance. By blending their onshore delivery and strong offshore supply
capability in India, Indian software companies such as TCS have significantly improved
the effectiveness of their delivery system of software services to global clients 17. As a
result the contribution of exports in total sales of TCS is consistently above 90 per cent
since 2001. Geographically, about 88 per cent of the company’s consolidated revenue
originates from overseas markets and America alone accounts for around 59 per cent
share (Table‐14). The share of European region is in the range of 21–23 per cent.
Table‐13
The Size of TCS, 2001–2006
Year
Revenue ($ million)
March 2006
March 2005
March 2004
March 2003
March 2002
March 2001
Source: hoovers.com
2,528.50
2,221.70
1,614.00
1,041.00
880
689
Net Income ($ million)
Net Profit Margin (%)
Employees (In number)
864.7
468.7
365.4
34.20%
21.10%
22.60%
62,832
40,992
24,000
19,000
16,000
Table‐14
Composition of TCS’ Global Revenue, 2005–2006
Region
2006
Consolidated Revenue (%)
2005
2003
Americas
59.06
59.20
Europe
22.40
23.08
India
12.50
12.18
Others
6.04
5.54
Total Revenue
100
100
Source: TCS Annual Report 2005–2006 and 2002–2003.
59.28
20.00
14.85
5.86
100
2002
61.13
20.63
11.94
6.31
100
Table‐15 summarizes the performance of overseas subsidiaries of TCS during 2005–2006.
The total assets and revenues of its overseas subsidiaries have grown by 158 and 33 per
cent respectively between 2005 and 2006. This high growth rate is because of two
factors—(i) expansion of existing subsidiaries and (ii) acquisition of new subsidiaries by
the parent firm. The New York‐based subsidiary, Tata America International
17
John Ribeiro (2004), ‘Pureʹ outsourcing model falls from favor: Indian BPO companies are
finding they need U.S. facilities and staff to run operations’, IDG News Service, October 07.
34
Corporation, is the largest overseas subsidiary accounting for about 39 and 81 per cent of
total overseas assets and sales respectively. The sales of this subsidiary have grown at a
rate of 28.4 per cent between 2005 and 2006. Other subsidiaries except TCS Iberoamerica
SA also have shown tremendous sales growth over the same period.
Table‐15
Assets and Turn overs of TCS’ Foreign Subsidiaries, 2005–2006
Name of the Subsidiary
Company
TCS Argentina S.A.
TCS FNS Pty. Limited
Financial Network
Services ‐Holdings Pty
Limited
Financial Network
Services Pty Limited
Financial Network
Services ‐Facilities
Management Pty Limited
Tata Consultancy Services
Belgium SA.
TCS Brazil S/C Limitada
Tata Consultancy Services
Do Brasil S.A.
Exegenix Canada Inc.
TCS Inversiones Chile
Limitada
Tata Consultancy Services
Chile S.A.
Tata Consultancy Services
Chile Limitada
Comicrom S.A.
Sisteco S.A.
Syscrom S.A.
Pentacrom S.A.
Pentacrom Servicios S.A.
Custodia De Documentos
Intres Limitada
Financial Network
Services Chile Limitada
Tata Information
Total Assets (Rs. Crore)
Change (%)
2006
2005
0.8
0.3
171.4
(0.02)
(0.02)
126.6
(3.75)
21.1
(0.63)
Turnover (Rs. Crore)
Change (%)
2006
2005
2.1
0.4
491.4
(0.03)
(0.01)
0.2
(0.00)
48.1
(1.42)
0.5
(0.01)
27.2
(0.36)
53.6
(1.59)
9.0
(0.27)
77.2
(2.290
3.3
(0.10)
117.9
(3.50)
15.8
(0.47)
117.5
(3.48)
56.8
(1.68)
7.0
(0.21)
11.4
(0.34)
4.7
(0.14)
2.2
(0.07)
3.2
(0.09)
Country of
location
Argentina
Australia
Australia
Australia
Australia
16.7
(1.28)
3.0
(0.23)
17.2
(1.32)
1.4
(0.11)
8.6
(0.66)
221.5
51.2
(0.67)
34
(0.59)
50.7
204.1
349.0
8263.1
83.5
Belgium
Brazil
98.8
(1.30)
1.8
(0.02)
0.0
(0.00)
28.1
(0.37)
34
(0.60)
186.4
Brazil
Canada
Chile
15
(0.26)
88.5
Chile
Chile
45.3
(0.59)
4.0
(0.05)
10.3
(0.14)
4.9
(0.06)
0.3
(0.00)
0.7
(0.01)
Chile
Chile
Chile
Chile
Chile
Chile
Chile
16.1
9.7
65.4
35
30.0
20
47.9
China
Name of the Subsidiary
Company
Technology ‐Shanghai
Company Limited
Tata Consultancy Services
France SA.
Tata Consultancy Services
Deutschland GmbH
Tata Infotech Deutschland
GmbH
Chong Wan Investments
Limited
Financial Network
Services ‐H.K. Limited
PT Financial Network
Services
TCS Italia SRL
Tata Consultancy Services
Japan Limited
Tata Consultancy Services
Luxembourg S.A
Tata Consultancy Services
Malaysia Sdn. Bhd.
Financial Network
Services Malaysia Sdn
Bhd
Tata Consultancy Services
de Mexico S.A. De. C.V.
Tata Consultancy Services
Netherlands BV.
Tata Consultancy Services
Portugal Unipesoal
Limitada
Tata Consultancy Services
Asia Pacific Pte Ltd.
Tata Infotech ‐Singapore
Pte. Limited
Financial Network
Services ‐Africa Pty Ltd
Tata Consultancy Services
de Espana S.A.
Tata Consultancy Services
Sverige AB.
Swedish Indian IT
Resources AB
Diligenta Limited
Financial Network
Services ‐Europe plc
Tata America
International Corporation
Total Assets (Rs. Crore)
Change (%)
2006
2005
(0.48)
(0.75)
0.5
(0.02)
152.9
(4.53)
0.5
(0.02)
‐1.2
(‐0.04)
0.0
(0.00)
0.6
(0.02)
36.2
(1.07)
39.8
(1.18)
13.4
(0.40)
6.6
(0.20)
0.1
(0.00)
0.6
(0.05)
41.3
(3.16)
15.4
(0.46)
163.5
(4.85)
1.2
(0.04)
4.2
(0.32)
85.5
(6.55)
123.9
(3.67)
2.7
(0.08)
0.0
(0.00)
3.6
(0.11)
71.4
(2.12)
0.5
(0.02)
515.0
(15.27)
0.8
(0.02)
1323.10
(39.23)
54.8
(4.20)
16.9
(1.30)
31.6
(2.42)
3.3
(0.25)
Turnover (Rs. Crore)
Change (%)
2006
2005
(0.39)
(0.35)
‐20.3
270.3
113.7
26.0
102.8
265.2
91.1
126.0
Country of
location
France
191.6
(2.52)
0.0
(0.00)
0.0
(0.00)
0.3
(0.00)
2.7
(0.04)
51.7
(0.68)
118.4
(1.55)
12.4
(0.16)
6.4
(0.08)
0.0
(0.00)
144
(2.51)
33.4
Germany
Germany
Hong Kong
Hong Kong
Indonesia
31
(0.54)
78
(1.36)
67.1
Italy
51.9
Japan
Luxembourg
2
(0.03)
278.2
Malaysia
Malaysia
23.2
(0.30)
193.1
(2.53)
0.9
(0.01)
8
(0.14)
177
(3.09)
143.2
(1.88)
1.5
(0.02)
93
(1.63)
190.5
Mexico
9.2
Netherlands
Portugal
53.3
Singapore
Singapore
South Africa
3.1
(0.24)
43.7
(3.35)
877.7
(67.24)
17.5
63.5
50.7
36
21.8
(0.29)
117.7
(1.55)
‐0.3
(0.00)
48.8
(0.64)
2.6
(0.03)
6186
(81.22)
10
(0.17)
79
(1.37)
123.9
Spain
49.8
Sweden
Sweden
U.K.
U.K.
4816
(84.26)
28.4
U.S.A.
Name of the Subsidiary
Company
CMC Americas Inc.
Total Assets (Rs. Crore)
Change (%)
2006
2005
37.7
29.2
29.1
(1.12)
(2.23)
TCS Iberoamerica SA.
155.9
41.9
271.9
(4.62)
(3.21)
TCS Solution Center S.A.
16.1
14.7
9.5
(0.48)
(1.13)
All subsidiaries
3372.6
1305.4
158.4
(100)
(100)
Note: percentage share is in parenthesis.
Source: TCS Annual Report 2004‐05 and 2005–06.
Turnover (Rs. Crore)
Change (%)
2006
2005
130.0
87
49.9
(1.71)
1.52
3.5
70
‐95.1
(0.05)
(1.23)
56.2
18
215.3
(0.74)
(0.31)
7616.7
5716
33.3
(100)
(100)
Country of
location
U.S.A.
Uruguay
Uruguay
Along with greenfield OFDI, TCS has been aggressively pursuing inorganic growth
through overseas acquisitions to become a global leader. After the acquisition of public
sector company Computer Maintenance Corporation (CMC) Ltd. in November 2001, TCS
set up a separate mergers and acquisitions (M&A) cell in December 2001 to identify
potential target companies that possess synergy with the core business of TCS and can
provide leveraging market strength 18. Since then TCS has been experimenting with
growth via “mergers and acquisitions that are a strategic fit, complement our capabilities
and plug gaps in our portfolio of offerings” (TCS Annual Report 2005–2006, p. 7). During
2005–2006, TCS acquired as many as six overseas business entities aggregating an
investment of about Rs. 10.2 billion (Table‐16). In May 2005, TCS acquired a Swedish
company named Swedish Indian IT Resources (SITR) through its wholly‐owned
subsidiary Tata Consultancy Services Sverige AB. The basic objective of this acquisition
was to deal directly with end‐customers rather than through SITR which was then TCS’
exclusive partner in Sweden and a non‐exclusive partner in Norway and also to increase
presence in the targeted market 19. The Australian company Financial Network Services
was acquired by TCS in October 2005 with the basic objective of strengthening
competitive position in the global banking industry. This acquisition ensures TCS’ access
to globally implemented BANCS software and a strong customer base that include banks
in emerging markets in Europe, Asia, Australia and Africa. This software has been
adopted by over 115 banks in 35 countries and TCS is motivated “to derive high
synergistic value by combining its own product portfolio with BANCS software and by
offering the customer its servicing capabilities” (TCS Annual Report 2005–2006, p. 18).
With a view to expand its presence and capability in the global business process
outsourcing (BPO), TCS acquired the BPO division of UK based Pearl Group in October
2005 and Chile based Comicrom in November 2005. In the UK life and pensions industry,
18
19
Financial Express (2001), ‘TCS forms special cell for mergers and acquisitions’, December 15.
TCS Annual Report 2005–2006, p. 18.
37
the acquired entity from Pearl Group is the second largest player and Comicron is the
biggest player in Chileʹs banking and pensions BPO business 20. Obviously, these
acquisitions are motivated to benefit from the local expertise, skills and customer base of
acquired entities and reap economies of operating synergies. In October 2006, TCS made
a strategic decision to acquire 75 per cent stake in Switzerland‐based TKS‐Teknosoft. This
acquisition is to increase the business of the company in Europe thus reducing excess
dependence on the US market and to access TKS’ ALPHA and e‐Portfolio product
portfolio, global distribution rights over QUARTZ (a wholesale banking product),
experience and domain expertise, language capabilities and knowledge of local
practices 21. The acquisition of an Australian company Total Communication Solutions
was inspired by the desire to enhance TCS’ market share in Australian business and IT
consulting market 22. In this case too the acquired entity is expected to provide substantial
operating synergies by bringing in knowledge and experience on local practices and
domain consulting.
Table‐16
Acquisition by TCS, 2001–2006
Year
Acquired Company
Country of
Incorporation
India
November 2001
Computer Maintenance Corporation
(CMC) Ltd.
January 2004
Airline Financial Support Services India
India
(AFS)
March 2004
Aviation Software Development
India
Consultancy India (ASDC)
July 2004
Phoenix Global Solutions
India
May 2005
Swedish Indian IT Resources AB
Sweden
October 2005
Financial Network Services
Australia
October 2005
BPO division of Pearl Group
UK
November 2005
Comicrom
Chile
February 2006
Tata Infotech
India
October 2006
TKS‐Teknosoft
Switzerland
November 2006
Total Communication Solutions
Australia
Source: Based on different newspaper reports, TCS’ website and various annual reports.
Value of the Acquisition
(Rs. Crore)
157
NA
14.03
27.02
21.50
110.27
426.20
103.84
stock swap
360
50
Above discussion shows that TCS has been employing OFDI in greenfield and
brownfield forms to increase its global presence, acquire new skills, technologies and
benefits from operating synergies. Given the strong base of skilled manpower, higher
20
21
22
Business Standard (2005), ‘TCS: Acquisition spree’, November 09.
Hindu Business Line (2006), ‘TCS buys 75% stake in Swiss co’, November 01.
Hindu Business Line (2006), ‘TCS buys Australian co for Rs 50 cr, Business Line’, November 09.
38
innovative activities 23 and aggressively pursued OFDI strategy the company is likely to
emerge as a leading Indian multinational in the global market.
5.2. H C L Technologies Ltd.
HCL technologies is a part of one of India’s oldest private sector hardware company
HCL enterprise that led the first ever IST OFDI from India in 1979. HCL came into
existence in August 1976 with a group of eight engineers who migrated from the
calculator division of DCM Limited. The exit of IBM left an unfulfilled domestic demand
for computers in India and companies like HCL came forward to meet that demand.
Government institutions like IITs, institutes of science and various engineering colleges
were source of the initial demand for computers from HCL 24. In 1978, the company went
for commercial computers and successfully launched in‐house designed micro‐
computers in India. With its initial strength, the company decided to go for international
production and received the government approval for a joint venture in Singapore in
1979, which started operating from 1980. This overseas expansion by HCL was targeted
at the SME (small and medium size enterprises) market and to exploit its modest
expertise in hardware 25. The operation in Singapore has provided immense learning to
the company, which Mr. Ajai Chowdhry, President and MD, HCL Infosystem, expressed
as follows: “However, once there, we realized that the demand was more for solutions,
not so much for boxes. We set up a software factory in Chennai—we would go to
customers and tell them we would do everything—make the box, write the software,
train the staff, maintain the equipment, the works…” 26 This is the beginning of HCL to
devote some focus on software services apart from its primary orientation on computer
hardware segment. The Software Export Division that was formed at Chennai in 1981
was to provide personalized application development needs of overseas clients in
Singapore 27. The Singapore experience led the company to work on the software
integration database much before Intel but could not foresee the technological changes so
it discontinued work on its original product. The company continued to grow in the
23
24
25
26
27
As of February 2007, Tata group (excluding Corus) owns about 8 patents granted by the USPTO.
Of these as many as 6 patent belongs to TCS, 2 patents are with TCS’ subsidiary Tata America
International Corporation and just 1 belong to Tata Tea Ltd. Source: Harish Damodaran (2007)
‘80 plus Corus patents for Tata Steel likely’, Hindu Business Line, February 04.
Hindu Business Line (2001), `Time to celebrate competitionʹ, September 05.
Interview of Mr. Ajai Chowdhry, President and MD, HCL Infosystem, in Dataquest (2002) ‘The
Making of a Giant’, March 15, first issue.
Interview of Mr. Ajai Chowdhry, President and MD, HCL Infosystem, Ibid.
The
history
of
HCL
Infosystems
Ltd
available
at
http://www.hclinfosystems.com/op_history.htm
39
domestic market in the 1980s by providing the largest selling software product to Indian
banks during computerization of Indian banks and by launching HCL designs Unix‐
based computers and IBM PC clones. It has also taken the initiative in IT education and
has established NIIT– the first private sector IT education institution in 1981.
In 1989, HCL entered into the US market with its expertise in computer hardware. This
product led entry of HCL turned out to be an imperfect expansion strategy marked by
inadequate resource base of the parent firm and its inability to even obtain required
environmental clearances. The US reversal led the company to rethink on its business
strategy to emphasize on its UNIX strengths for software development 28. HCL’s joint
venture with Hewlett Packard in 1991 turned out to be a turning point in the growth of
the company. HCL had a great learning experience with HP providing technical
assistance to HCL in providing IT based services covering systems integration, IT
consulting, and packaged support services. As a part of the joint venture agreement,
HCL employees got the opportunity to work at the HP research centres mastering all of
the technologies developed by the joint venture partner. However, HCL did not close
down its RISC (Reduced Instruction Set Computer) and UNIX R&D units set‐up as asked
by HP and continued its R&D work under a separate entity named HCL Consulting. This
is a classic example of how a domestic company has leveraged its technological
capability by collaborating with a foreign firm.
The favourable policy regime for software exports and uncertain policy on hardware
segment pursued by India has affected the business behaviour of HCL significantly. The
company, which was predominantly a hardware player, started aggressively focusing on
software and services in the mid‐1990s. It also wanted to derive growth benefits from the
home country’s cheap manpower advantage as exploited by faster growing software
companies like TCS, Wipro, etc. In 1994, HCL successfully completed its first offshore
project from IBM Thailand and has set up a core group to define software development
methodologies. Taking advantage of the policy of Software Technology Park (STP), the
company entered into STPs at Chennai, Kolkata and Noida during 1996–97. In 1997 HCL
bought back HP stake in HCL Hewlett Packard and HCL Consulting was later turned
into HCL Technologies in 1998. The software business of HCL grew impressively in the
late 1990s to dominate its overall business—the hardware to software ratio has
consistently declined from 83:17 in early 1990s to 38:62 in 1997–98 to further 23:77
(including NIIT) in 2000–01 (Dataquest, 2001) 29.
28
29
Interview of Mr. Ajai Chowdhry, President and MD, HCL Infosystem, Ibid.
Dataquest (2001) ‘HCL: Top of the Giants; A continuing shift toward services kept all group
companies growing and profitable, and helped the HCL group stay No 1’, July 21.
40
The late 1990s further saw HCL technologies establishing a number of greenfield
subsidiaries in European countries like UK, Germany, Sweden, Belgium and Italy with
the objective of providing software services on‐site nearer to the overseas customers. The
OFDI activity of the company was also directed at other developed countries such as
New Zealand, Australia, Japan and Hong Kong. The company is also a forerunner
among Indian IST firms to use acquisition as a strategy of growth. Its acquisition
activities cover four overseas acquisitions targeting two countries such as Ireland and
USA (Table‐17). In December 2001 it acquired Ireland‐based Apollo Contact Centre for
$11.5 million to gain a sound market presence in the IT‐enabled services space and in the
European market 30. The acquisition of Gulf Computers Inc. in June 2002 was motivated
to
Table‐17
Acquisition by HCL Technologies, 2001–2005
Month and Year
Feb. 2005
Acquired Entity
AnswerCall Direct Contact Centre
Feb. 2005
Aquila Technologies Ltd (balance 43 per cent
stake)
Dec. 2004
Apollo Contact Centre (10 percent stake)
Dec. 2004
Aalayance Inc. (Additional 36 per cent stake)
Oct. 2004
Shipara Technologies (remaining 23 per cent
stake)
July 2004
Aquila Technologies Ltd (additional 21.5 per
cent stake)
Jan. 2003
Aalayance Inc. (19 per cent stake)
June 2002
Gulf Computers inc.
May 2002
Aquila Technologies Ltd (35.5 per cent stake)
Dec. 2001
Apollo Contact Centre (90 percent stake)
Sept. 2001
Deutsche Software (51 per cent stake)
Source: Based on various newspaper reports.
Country of
Incorporation
Value of the deal
Ireland
Rs. 29.39 crore
India
Ireland
USA
India
Rs. 15.23 crore
$1.9 million
India
USA
USA
India
Ireland
India
$0.45 million
$9.75 million
Rs 5.55 crore
$12.7million
$11.5 million
access the strong client relationship and established advantages in application
development for business process automation of the targeted entity in the US market 31.
The acquisition of strategic stake in the US based Aalayance Inc. in 2003 was to further
improve the expertise of HCL technologies in the areas of enterprise application
30
31
Newsbytes News Network (2001), ‘India ‐ HCL Tech Acquires Irish Firm For $11.5Mil’, October
30.
Hindu Business Line (2002), ‘HCL Tech buys Gulf Computers’, June 02.
41
integration and business integration 32. By acquiring the assets and business of
AnswerCall Direct in 2005, HCL technologies catapulted to the single largest Outsourced
Contact/BPO Centre operating in Ireland 33. This acquisition has provided access to
expertise in newer domains of call centre services like media and transportation.
The foreign assets and revenues of HCL technologies is observed to be overwhelmingly
concentrated in developed countries. Respectively about 81.6 and 93.7 per cent of foreign
assets and revenues of the company in 2006 is accounted by them (Table‐18). Within the
Table‐18
Geography of HCL Technologies’ Foreign Assets and Sales, 2005–2006
Assets (%)
Region/Country
Developed Countries
Europe
Austria
Belgium
Germany
Italy
Netherlands
Sweden
UK
North America
USA
Canada
Other Developed Countries
Australia
Japan
New Zealand
Developing Countries
Africa
Mauritius
Latin America
Bermuda
Asia
Malaysia
Singapore
Hong Kong
All Region
Source: Based on Table‐18.
2006
81.6
37.0
15.9
0.2
2.6
0.0
0.6
0.4
17.4
42.3
42.3
0.0
2.2
0.8
1.2
0.2
18.4
0.9
0.9
14.8
14.8
2.7
1.0
1.3
0.4
100
Sales (%)
2005
77.2
40.4
13.8
0.2
16.4
0.0
0.3
0.2
9.4
35.4
35.4
0.0
1.5
0.6
0.7
0.2
22.8
1.1
1.1
18.8
18.8
2.9
0.9
1.7
0.3
100
2006
93.7
30.4
1.1
0.2
1.5
0.0
0.6
0.3
26.6
56.3
56.3
0.0
7.1
2.8
3.3
0.9
6.3
0.0
0.0
1.3
1.3
5.1
1.3
3.0
0.7
100
2005
94.7
46.6
0.5
0.2
29.0
0.0
0.2
0.1
16.6
43.2
43.2
0.0
4.8
2.2
1.9
0.7
5.3
0.0
0.0
1.2
1.2
4.2
1.2
2.2
0.7
100
developed region, North America led by USA is the largest overseas market for the
company. Europe is the second most important foreign market for the company largely
32
33
Hindu Business Line (2003), ‘HCL Tech acquires 19 pc stake in US company’, January 18.
Hindu Business Line (2005), ‘HCL Tech acquires call centre in Ireland’, February 25.
42
led by UK and Germany. However, the share of Germany has substantially plummeted
between 2005 and 2006, thus leaving UK as the largest European market. Although
developing countries account for about 18 per cent of HCL technologies’ foreign assets
their contribution to foreign revenue is as low as 5 per cent.
The distribution of the foreign assets and revenues of HCL technologies among its
individual foreign firms is summarized in Table‐19. It can be seen that majority of HCL
technologies’ foreign subsidiaries are of small size in terms of the asset base. Of the 31
foreign subsidiaries, just four (HCL America Inc., HCL Holdings GmbH, HCL Bermuda,
and HCL Great Britain) accounted for about 84 per cent of the total foreign asset of the
parent company in 2006. Similar feature can also be obtained in terms of revenue
distribution and the three large subsidiaries (HCL America Inc., HCL Great Britain, and
HCL BPO Services (NI)) together accounted for about 78 per cent of total foreign sales of
the parent firm in 2006. Between 2005 and 2006, the assets and sales of all foreign
subsidiaries have been characterized by moderate change of 3.63 and 2.52 per cent
respectively. However, there are substantial differences among individual foreign
subsidiaries with respect to expansion of total assets and growth of sales during 2005–
2006. Substantial investment in total assets has been undertaken in seven overseas
subsidiaries such as HCL GmbH (279 per cent), HCL Great Britain (157 per cent), HCL
Sweden AB (82 per cent), HCL Japan (74 per cent), HCL (Netherlands) (72.3 per cent),
HCL Technologies (Mass) (69 per cent), and HCL Australia Services Pty. (59 per cent). At
the same time, there has been significant dilution in the assets of small‐sized foreign
subsidiaries such as E Serve Holding, HCL Venture Capital, DSI Financial Solutions Pte,
HCL Jones (Bermuda), and HCL Italy SLR. This trend in asset formation clearly shows
that the parent company is making efforts to strengthen its market position in the
European countries and also in Japan. In terms of revenue performance between 2005
and 2006, an impressive growth can be seen in HCL Sweden AB, HCL GmbH, HCL
(Netherlands) BV, HCL Holdings GmbH, HCL Great Britain, HCL Japan, HCL Singapore
Pte, HCL America Inc., HCL Australia Services Pty., HCL (New Zealand), HCL BPO
Services (NI), and HCL Bermuda.
Table‐19
Assets and Turnovers of HCL Technologies’ Foreign Subsidiaries, 2005–2006
Name of the Subsidiary
Company
HCL Bermuda
Limited
HCL America Inc.
HCL Great Britain
Limited
Total Assets (Rs. Crore)
2006
2005
Change (%)
427.59
516.68
‐17.24
(14.49)
(18.15)
1194.42
971.58
22.94
(40.48)
(34.12)
382.04
148.59
157.10
(12.95)
(5.22)
43
Turnover (Rs. Crore)
2006
2005
Change (%)
17.56
13.94
26.02
(0.59)
(0.48)
1531.16
1121.79
36.49
(51.28)
(38.52)
529.69
273.12
93.94
(17.74)
(9.38)
Country of
location
Bermuda
USA
UK
Name of the Subsidiary
Company
HCL Sweden AB
HCL (Netherlands)
BV
HCL GmbH
HCL Italy SLR
HCL Belgium NV
HCL Australia
Services Pty. Ltd.
HCL (New Zealand)
Limited
HCL Hong Kong SAR
Limited
HCL Japan Limited.
HCL Holdings GmbH
HCL Venture Capital
Limited
E Serve Holding
Limited
HCL Enterprise
Solutions Ltd.
DSI Financial
Solutions Pte Limited
HCL BPO Services
(NI) Ltd.
HCL Technologies
(Mass) Inc.
HCL Jones LLC
HCL Jones (Bermuda)
Limited
HCL m.a. Limited
Insys Inc, Canada
HCL Singapore Pte
Limited
HCL (Malaysia) Sdn.
Bhd
Infosystems (Europe)
Limited
HCL EAI Services Inc.
Aalayance (UK)
Limited
Total Assets (Rs. Crore)
2006
2005
Change (%)
11.42
6.28
81.97
(0.39)
(0.22)
16.58
9.62
72.34
(0.56)
(0.34)
77.45
20.42
279.26
(2.62)
(0.72)
0.04
0.06
‐20.14
(0.00)
(0.00)
5.59
4.71
18.72
(0.19)
(0.17)
24.59
15.58
57.86
(0.83)
(0.55)
7.15
5.41
32.13
(0.24)
(0.19)
11.01
8.53
29.17
(0.37)
(0.30)
34.15
19.67
73.59
(1.16)
(0.69)
468.26
392.95
19.17
(15.87)
(13.80)
0.38
4.78
‐92.16
(0.01)
(0.17)
0.02
4.4
‐99.60
(0.00)
(0.15)
27
25.65
5.25
(0.92)
(0.90)
0.53
1.16
‐53.89
(0.02)
(0.04)
130.55
119.31
9.42
(4.42)
(4.19)
25.45
15.07
68.84
(0.86)
(0.53)
15.84
12.66
25.12
(0.54)
(0.44)
8.14
13.95
‐41.61
(0.28)
(0.49)
0.04
0.03
19.55
(0.00)
(0.00)
0
0.01
‐51.00
(0.00)
(0.00)
38.67
47.34
‐18.30
(1.31)
(1.66)
29.2
25.69
13.66
(0.99)
(0.90)
0.62
0.62
‐0.39
(0.02)
(0.02)
13.76
(0.47)
0.22
(0.01)
44
Turnover (Rs. Crore)
Country of
location
2006
2005
Change (%)
9.29
2.63
252.95
Sweden
(0.31)
(0.09)
18.07
5.76
213.66
Netherlands
(0.61)
(0.20)
44.11
14
215.11
Germany
(1.48)
(0.48)
0
0
‐93.48
Italy
(0.00)
(0.00)
6.99
6.42
8.93
Belgium
(0.23)
(0.22)
84.26
65.02
29.60
Australia
(2.82)
(2.23)
27.15
21.25
27.73
New Zealand
(0.91)
(0.73)
21.38
21.11
1.24
Hong Kong
(0.72)
(0.72)
99.57
54.9
81.38
Japan
(3.33)
(1.89)
32.36
14
131.10
Austria
(1.08)
(0.48)
5.97
Bermuda
(0.20)
0.03
Mauritius
(0.00)
0
Mauritius
(0.00)
Singapore
(0.00)
265.39
209.44
26.72
UK
(8.89)
(7.19)
56.47
66.31
‐14.85
USA
(1.89)
(2.28)
50.46
50.77
‐0.62
USA
(1.69)
(1.74)
14.24
19.97
‐28.66
Bermuda
(0.48)
(0.69)
0
UK
(0.00)
Canada
(0.00)
90.11
65.34
37.91
Singapore
(3.02)
(2.24)
39.32
35.25
11.55
Malaysia
(1.32)
(1.21)
UK
(0.00)
41.51
USA
(1.39)
0.54
UK
(0.02)
Name of the Subsidiary
Company
Aalayance Inc.
Infosystems Australia
Pty. Ltd.
DSL GmbH
Total Assets (Rs. Crore)
2006
2005
Change (%)
7.78
(0.27)
0.93
(0.03)
447.98
(15.73)
Turnover (Rs. Crore)
2005
Change (%)
20.1
(0.00)
(0.69)
0.01
(0.00)
(0.00)
831.25
(0.00)
(28.54)
2006
2950.71
2847.44
3.63
2985.63
(100.00)
(100.00)
(100.00)
Note: percentage share is in parenthesis.
Source: HCL Technologies Annual Report 2004‐05 and 2005–06.
All subsidiaries
2912.38
(100.00)
Country of
location
USA
Australia
Germany
2.52
6. Conclusion
The emergence of IST multinationals from India is a result of growing sophistication of
Indian national innovation system (NIS). The government has played a crucial role in the
innovation process by creating conditions for skills accumulation, infrastructure building
and adopting a more conducive and systematic outward looking policy for software
industry. Indian software firms, in turn, have shown their ability to leverage from
availability of skill resources and improve their firm‐specific technology and other
capabilities. As far as Indian households are concerned, they send their members for
technical education in India and abroad and overseas labour markets (mainly US) as
skilled workers linking Indian IST industry with global market by providing valuable
contacts, linkages, and networking. The development of financial institutions like bank,
capital market and venture capital, democratic polity, etc., also have positively
influenced the growth of India’s capabilities in the IST sector. With strong capabilities in
skill‐based technologies, Indian IST firms started serving global customers by
establishing their subsidiaries overseas. This OFDI drive of these firms is primarily
motivated to exploit firm‐specific advantages through an offshore‐onshore model of
service delivery.
There are four distinct features of Indian IST multinationals. First, majority of their
overseas subsidiaries are in developed countries with USA and UK as the two major
hosts. The share of developed countries is about 69 per cent in total number of IST
overseas subsidiaries from India. Developing countries accounted for just 31 per cent and
Asia is the major host developing region with about 25 per cent. Second, the Indian IST
multinationals tend to have majority ownership over their overseas ventures. Third,
there is a high level concentration among Indian IST multinationals on the number of
their overseas subsidiaries. A group of sixty large IST multinationals (about 36 per cent of
total IST multinationals) disproportionately accounts for over 72 per cent of Indian IST
overseas subsidiaries. Fourth, the firm‐specific characteristics of Indian IST
45
multinationals indicate that they are large‐sized and highly export oriented and possess
relatively higher values for R&D intensity, advertising intensity and firm age as
compared to Indian IST firms not investing in overseas investment. The case study of two
selected large Indian IST multinationals reveals the firm‐level dynamics in growth and
capability building under an evolving and a favourable NIS.
6.1. Implications for Developing Countries
India’s development experience in the IST industry offers a number of lessons to policy
makers in other developing countries aspiring to benefit from promoting their own IST
industry. Being a skill‐based industry, a developing country may find it easier to build
capability in the IST industry with relatively less resources than what may be required in
the case of capital intensive manufacturing industries. These countries should judiciously
invest their scarce resources in specific skill and infrastructural development required by
IST industry. A more proactive government policy based on cluster approach and
openness to IST FDI can also contribute to the development of IST industry. With the
Indian IST multinationals showing increasing intensity to secure overseas skill base,
other developing countries can also invite these firms to set up development and training
centres in their respective location so as to benefit from knowledge‐spillovers effect.
Overall, developing countries need to build up a suitable NIS for achieving critical
success in the global IST sector. This suitable NIS should address following three main
areas of interventions:
i. E st ab l i sh me nt of Skill In sti tut ion s
The most important factor that contributes to the development of software industry is
availability of requisite skills in a country. India’s unprecedented success in this industry
can be traced back to a pool of highly trained software professionals routinely churned
out by a rising number of public‐funded autonomous technology centres like IITs, IISs,
Regional Engineering Colleges, etc. Obviously, government investment in specific skill
creation has a critical bearing on the growth of IST industry. Hence, developing countries
should establish a chain of institutions in engineering and computer science and these
technology institutions in turn will act as national centres for knowledge creation
meeting the skill requirement of the IST industry. Besides, promoting technical
knowledge and computer skills through general educational institutions like universities,
colleges, schools, etc., can go a long way in helping developing countries to develop their
own IST sector.
46
ii . Imp ro vem en t in Inf r a st ru ctu r e and Pro mo ti o n o f I T Usage
The Indian experience highlighted the importance of developing quality
telecommunication and physical infrastructure for encouraging the growth of IST
industry. Indian government has promoted several Software Technology Parks as a cost‐
effective means of ensuring infrastructure like high speed satellite links, power, etc., and
has also provided incentives for locating services centres in such industrial clusters.
Other developing countries shall explore ways to replicate India’s experience in the
provision of infrastructure in cost‐effective manners. They should also go for
computerization of various government departments thus generating demand for
domestic software companies. Use of computers, internet, and other IT technologies in
the domestic economy also needs to be encouraged by various policy initiatives.
iii . A n Outw ard‐l ook ing Poli cy R egim e
A systematic and outward‐looking policy regime emerges as one of the critical factors
leading to the rise of Indian IST industry. Developing countries’ policy framework needs
to adopt a more liberal attitude to the IST foreign investment. Inward foreign software
services companies tend to provide state of the art training to domestic manpower and
thus could generate valuable skill spillover effects in the host developing countries.
These trained professionals by foreign firms could later start their own enterprises, as
happened in the case of India in the post‐IBM period. Domestic software companies
should also be encouraged to enter into collaborative alliances with foreign firms.
Various fiscal incentives to domestic software firms like exempting their export and
consultancy revenues from custom duties and taxation, permitting them to have easy
and duty‐free imports of computers and other accessories, etc., are also valuable policy
tools.
The above‐listed policies together with those directed at helping the domestic firms with
easy and cheap financial resources, information, marketing‐support, R&D facilities, etc.,
can help other developing countries to develop their indigenous IST industry.
6.2. Implications for India
Although India is able to promote globally competitive software industry based on a well
crafted NIS, its policy emphasis now needs to focus on emerging problems faced by the
industry. The skill manpower, the fundamental competitive source of Indian software
capability, is increasingly falling short of the requirement of a phenomenally growing
sector. A sharp shortage of skilled labour can be seen in different segments of the IT
sector. For example, the projected requirement for Outsourced Product Development
47
segment is 2.8 lakh product engineers by 2008, where the current availability of product‐
focused software professionals is just about 80,000 34. As per Nasscom‐McKinsey Report
2005 on Extending India’s leadership in the global IT and BPO industries, India requires
an additional 5 lakh professionals just to maintain its existing share in the global IT and
BPO industries. While Indian government has set up additional IITs and IIMs and taken
steps to covert Regional Engineering Colleges into National Institute of Technologies, the
resources available at the disposal of policy makers for investing in higher education is
quite inadequate. In this case policy measures to encourage private training institutions
are required. It is not just the quantity of skilled manpower that is important for Indian
IT sector but also, and more importantly, access to relevant skill. In this context, training
and skill institutions should show needed flexibility to redraft their syllabus and courses
in accordance with the skill requirement of a dynamic industry.
Apart from addressing the problem of skill shortages, India needs to tackle severe
infrastructural constraints faced by urban locations hosting software technology parks.
For example, India’s Silicon Valley, Bangalore, is increasingly witnessing a serious lack of
the basic infrastructure involving roads, electricity, public transportation, airport
facilities and suffering from congestation and rising pollution 35. Since these urban
locations ac as nerve centres of India’s software exports, it is essential that infrastructure
spending must be at a comparable pace as the growth of these cities.
6.3. Implications for Indian IST Firms
Overseas presence through sales and development subsidiaries is a critical factor for
increasing software exports from India and to maintain the global market share. In this
context, outward FDI constitutes a basic element for developing an efficient and
successful onshore‐offshore model of service delivery system. The phenomenal growth of
India’s successful companies like TCS and HCL technologies can be attributed to their
pioneering attempts to open sales subsidiaries abroad and then to establish software
development subsidiary. It is also important for Indian companies to pursue the route of
overseas acquisition to enter into a foreign market or to gain access to skill and
knowledge‐base of a host country. Once they have a sound acquisition strategy with well
designed integration process, then acquisition provides an easy way to acquire new
business domain or strengthen global position in a particular area.
34
35
Financial Express (2005), ‘Skill shortage hits outsourced product development industry’, August
22.
New York Times (2005), ‘Companies rebel over Bangaloreʹs sad state’, September. 13.
48
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51
Appendix
Table‐A1
Information on Overseas Subsidiaries of Indian IST Multinationals
Name of Indian Parent Firm Name of Overseas Venture
3I Infotech Ltd.
3I Infotech Ltd.
3I Infotech Ltd.
3i Infotech (Thailand) Ltd
SDG Software Technologies Pte. Ltd.
3I Infotech SDN BHD (formerly
ICICI Infotech SDN BHD)
3I Infotech Ltd.
3i Infotech (UK) Ltd
3I Infotech Ltd.
3I Infotech Pte Ltd (formerly ICICI
Infotech Pte Ltd)
3I Infotech Ltd.
3i Infotech Consulting Inc.
3I Infotech Ltd.
3i Infotech Inc.
3I Infotech Ltd.
FormulaWare Inc
AG Technologies Pvt. Ltd AG Tech, Inc.
AXIS‐IT&T Ltd.
Axis Inc.
AXIS‐IT&T Ltd.
Axis EU Limited
Aftek Ltd.
Arexera Information Technologies
GmbH
Aftek Ltd.
Opdex Inc USA (Formerly known as
Aftek Infosys (USA) Inc.)
Akal information Systems SG Martin Infoways (USA) Ltd.
Ltd
Allsec Technologies Ltd. B2K Corp Inc.,
Allsec Technologies Ltd. Allsectech Inc.,
Apt Software Avenues
Agarwal Associates Ltd
Pvt Ltd
Aptech Ltd.
Aptech Worldwide Corporation
Aptech Ltd.
Aptech (WOS) Bangladesh Limited
Aptech Ltd.
Beijing Aptech Beida Jade Bird
Information Technology Co. Limited
Aptech Ltd.
Aptech Training Limited FZE
Aptech Ltd.
Aptech Worldwide Limited
Artech Infosystems Pvt
Dalton International Limited
Ltd
Artech Infosystems Pvt
Artech Information Systems L.L.C.
Ltd
Artech Infosystems Pvt
Artech China Ltd
Ltd
Aspire Systems (India)
Aspire Systems, Inc.
Pvt. Ltd.
Aurionpro Solutions Ltd. Software Professional Services
Aurionpro Solutions Ltd. Aurionpro Solutions PTE Ltd
Aurionpro Solutions Ltd. Aurionpro Solutions, SPC
Aurionpro Solutions Ltd. Coban Corporation,
Aurionpro Solutions Ltd. Agile Solv LLC
52
Year of
the data
Thailand
Singapore
Malaysia
%age of
equity
holding
100%
100%
100%
S
S
UK
Singapore
100%
100%
2006
2006
S
S
S
S
S
S
S
USA
USA
USA
USA
USA
UK
Germany
100%
100%
100%
100%
100%
100%
2006
2006
2006
2006
2006
2006
2006
S
USA
100%
2006
S
USA
S
S
S
USA
USA
UK
100%
100%
2006
2006
2006
S
S
JV
USA
Bangladesh
China
100%
100%
50%
2005
2005
2005
S
S
S
UAE
South Africa
UK
100%
2005
2005
2006
S
USA
2006
S
China
2006
S
USA
2006
S
S
S
S
S
USA
Singapore
Bahrain
USA
USA
S / JV /
AC*
Country of
incorporation
S
S
S
2006
2006
2006
2006
100%
100%
100%
2006
2006
2006
2006
2006
Name of Indian Parent Firm Name of Overseas Venture
Aurionpro Solutions Ltd.
Aurionpro Solutions Ltd.
Aztecsoft Ltd.
Aztecsoft Ltd.
B 2 B Software
Technologies Ltd.
B 2 B Software
Technologies Ltd.
B 2 B Software
Technologies Ltd.
B 2 B Software
Technologies Ltd.
BPL Telecom Pvt. Ltd.
BPL Telecom Pvt. Ltd.
BPL Telecom Pvt. Ltd.
BPL Telecom Pvt. Ltd.
BPL Telecom Pvt. Ltd.
BPL Telecom Pvt. Ltd.
Bangalore Softsell Ltd.
Bangalore Softsell Ltd.
Blue Star Infotech Ltd.
Blue Star Infotech Ltd.
C G‐V A K Software &
Exports Ltd.
C M C Ltd.
CG‐Smith Software
Private Limited
California Software Co.
Ltd.
California Software Co.
Ltd.
California Software Co.
Ltd.
California Software Co.
Ltd.
Cambridge Solutions Ltd.
Cambridge Solutions Ltd.
Cambridge Solutions Ltd.
Cambridge Solutions Ltd.
Cambridge Solutions Ltd.
Cambridge Solutions Ltd.
Cambridge Solutions Ltd.
Cambridge Solutions Ltd.
Cambridge Solutions Ltd.
Cambridge Solutions Ltd.
Country of
incorporation
Infobyte International WLL
Aurionrpo Solutions INC
Disha Technologies Inc
Aztec Software Inc.
B2B Infotech SDNBHD
S
S
S
S
S
Bahrain
USA
USA
USA
Malaysia
100%
100%
100%
100%
2006
2006
2006
2006
2006
B2B Infotech Pte Limited
S
Singapore
100%
2006
B2B Software Technologies Kassel
GmbH
B2B Softech Inc
S
Germany
100%
2006
S
USA
100%
2006
P.R. Glolinks Consulting
ATL Industries Pte Ltd.
BPL Systems
SEAIN Solutions Limited
BK Solutions Limited
HANI Corporation
Lemit Inc.
nv Lemit Europe sa
Blue Star Infotech (UK)
Blue Star Infotech America Inc
C G‐V A K Software Usa Inc.
S
S
S
S
S
S
S
S
S
S
S
UK
Singapore
USA
Taiwan
Japan
Korea
USA
Belgium
UK
USA
USA
100%
100%
100%
100%
100%
2006
2006
2006
2006
2006
2006
2006
2006
2006
2006
2005
C M C Americas,Inc.
CG‐Smith Software Inc.
S
S
USA
USA
100%
2006
2006
Informed Decisions Corporations
S
USA
51%
2006
Cswl Inc. Usa
S
USA
100%
2006
American Healthnet Inc
S
USA
52%
2006
Healthnet International Inc
S
USA
100%
2006
BWH SARL
Cambridge Integrated Services
Victoria Pty Ltd
Scandent Group Pte Ltd.,
ProcessMind Holdings Mauritius
Limited
Cambridge Integrated Services
Group Inc.
Cambridge Presidium Holdings Inc.
Scantalent Inc,
Indigo Markets Ltd, Bermuda
Scandent Network Europe Ltd.,
ProcessMind Services Inc
S
S
France
Australia
100%
100%
2006
2006
S
S
Singapore
Mauritius
100%
100.00%
2006
2006
S
USA
100%
2006
S
S
S
S
S
USA
USA
Bermuda
UK
USA
100%
100%
100%
100%
100%
2006
2006
2006
2006
2006
53
%age of
equity
holding
Year of
the data
S / JV /
AC*
Name of Indian Parent Firm Name of Overseas Venture
Cambridge Solutions Ltd.
Cambridge Solutions Ltd.
Cambridge Solutions Ltd.
Cambridge Solutions Ltd.
Cambridge Solutions Ltd.
Cambridge Solutions Ltd.
Cambridge Solutions Ltd.
Cambridge Solutions Ltd.
Cambridge Solutions Ltd.
Cherrysoft
Compucom Software Ltd.
Compudyne
Winfosystems Ltd.
Compulink Systems Ltd.
Compulink Systems Ltd.
Compulink Systems Ltd.
Congruent Solutions
Private Limited
Congruent Solutions
Private Limited
Contech Software Ltd.
Core Projects &
Technologies Ltd.
Core Projects &
Technologies Ltd.
Cranes Software Intl. Ltd.
Cranes Software Intl. Ltd.
Cranes Software Intl. Ltd.
Cranes Software Intl. Ltd.
Cranes Software Intl. Ltd.
Cressanda Solutions Ltd.
Cressanda Solutions Ltd.
Cybertech Systems &
Software Ltd.
Cybertech Systems &
Software Ltd.
Cybertech Systems &
Software Ltd.
Cybertech Systems &
Software Ltd.
Cybertech Systems &
Software Ltd.
Cybertech Systems &
Software Ltd.
Year of
the data
USA
UK
Singapore
USA
USA
%age of
equity
holding
100%
100%
100%
100%
100%
S
S
S
S
Germany
Malaysia
USA
Australia
100%
100%
100.00%
100%
2006
2006
2006
2006
100%
100%
2006
2006
2006
S / JV /
AC*
Country of
incorporation
S
S
S
S
S
Scandent Group Inc,
Indigo Markets Europe Limited,
Indigo Markets Singapore Pte Ltd
Albion Inc,
Cambridge Galaher Settlements &
Insurance Services
Scandent Group GmbH,
ScadentGroup Sdn, BHD,
e‐Business Corp. Inc,
Cambridge Integrated Services
Australia Pty Ltd.
Cherrytech Solutions
ITneer, Inc.,
COMPUDYNE WINFOSYSTEMS
INC.
Compulink USA Inc.
Compulink Software Pte. Ltd.
Compulink Europe Ltd.
Congruent Solutions, Inc
S
S
S
USA
USA
USA
S
S
S
S
USA
Singapore
UK
USA
Congruent Solutions, Pte. Ltd.
S
Singapore
2006
Contech America Inc.
Enterprises Computing Services, Inc.,
S
S
USA
USA
2006
2006
CORE Projects & Technologies
(FZE),
Cranes Software International Pte
Limited
Systat Software Inc
Systat Software GmbH
NISA Software Inc.,
Systat Software UK Limited, United
Kingdom
Cressanda Solutions UK Limited
Cressanda Solutions, Inc.
CyberTech Europe S.A.
S
UAE
2006
S
Singapore
100%
2006
S
S
S
S
USA
Germany
USA
UK
100%
100%
100%
100%
2006
2006
2006
2006
S
S
S
UK
USA
Luxembourg
100%
2006
2006
2006
CyberTech Information Services
BVBA
CyberTech Systems and Software
Inc.
Corliant Inc.,
S
Belgium
100%
2006
S
USA
100%
2006
JV
USA
4%
2006
CyberTech Systems Inc.
AC
USA
2006
Corliant Japan, K.K.
AC
Japan
2006
54
100%
100%
100%
2006
2006
2006
2006
2006
2006
2006
2006
2006
Year of
the data
USA
%age of
equity
holding
100%
S
UK
100%
2006
S
USA
100%
2006
Datamatics Technologies GmbH
S
Germany
100%
2006
DecisionCraft Inc.
S
USA
100%
2006
Ncore Usa Inc
FI Sofex LLC
Financial Technologies Middle East
DMCC
Dubai Gold and Commodities
Exchange DMCC
Accounts Solutions Group, LLC
S
JV
S
USA
USA
UAE
100%
2006
JV
UAE
50%
2006
S
USA
100.00%
2006
FirstRing Inc, USA (ʹFRUSʹ)
S
USA
100%
2006
MedPlans Partners
S
USA
100%
2006
Firstsource Solutions S.A.
S
Argentina
100%
2006
MedPlans 2000 Inc
S
USA
100.00%
2006
Business Process Management, Inc
S
USA
100%
2006
Pipal Research Corporation
S
USA
51%
2006
Sherpa Business Solutions Inc
S
USA
100%
2006
Firstsource Solutions USA Inc
S
USA
100%
2006
Firstsource Solutions Limited
S
UK
100%
2006
HSS Japan KK
S
Japan
100%
2005
Tenet Software Limited
S
UK
100%
2005
Tenet Technologies Inc.
S
USA
100%
2005
Fortune Infotech USA, Inc.
Four Soft LLC
Four Soft Germany GmbH
Four Soft B.V.,
Four Soft UK Limited
Four Soft USA Inc.
S
S
S
S
S
S
USA
USA
Germany
Netherlands
UK
USA
100%
100%
100%
100.00%
100%
2006
2006
2006
2006
2006
2006
Name of Indian Parent Firm Name of Overseas Venture
Danlaw Technologies
India Ltd.
Datamatics Technologies
Ltd.
Datamatics Technologies
Ltd.
Datamatics Technologies
Ltd.
DecisionCraft Analytics
Limited
Encore Software Ltd.
F I Sofex Ltd.
Financial Technologies
(India) Ltd.
Financial Technologies
(India) Ltd.
Firstsource Solutions
Limited
Firstsource Solutions
Limited
Firstsource Solutions
Limited
Firstsource Solutions
Limited
Firstsource Solutions
Limited
Firstsource Solutions
Limited
Firstsource Solutions
Limited
Firstsource Solutions
Limited
Firstsource Solutions
Limited
Firstsource Solutions
Limited
Flextronics Software
Systems Ltd.
Flextronics Software
Systems Ltd.
Flextronics Software
Systems Ltd.
Fortune Infotech Ltd.
Four Soft Ltd.
Four Soft Ltd.
Four Soft Ltd.
Four Soft Ltd.
Four Soft Ltd.
S / JV /
AC*
Country of
incorporation
Danlaw Technologies Inc, Usa
S
Datamatics Technologies U.K
Limited
Datamatics Technologies Inc.
55
2006
Year of
the data
Singapore
Netherlands
Malaysia
Mauritius
%age of
equity
holding
100%
100%
100%
100%
S
S
S
S
Australia
USA
Sri Lanka
UAE
100%
100%
100%
90%
2006
2006
2006
2006
S
S
S
S
S
S
UK
Singapore
Mauritius
Germany
UAE
Oman
100%
100%
100%
100%
100%
2006
2006
2006
2006
2006
2006
S
Singapore
S
USA
100%
2006
Aerial Surveyor Limited
S
UK
100%
2006
Genesys International (UK) Limited
S
UK
100%
2006
Engage Solutions Ltd.,
S
Hong Kong
100%
2006
Geodesic Information Systems AB,
S
Sweden
76%
2006
Geodesic Information Systems Inc.,
S
USA
100%
2006
Geodesic Information Systems Pte.
Ltd.,
TekSoft, Inc.
S
Singapore
100%
2006
S
USA
82%
2006
Geometric Software Solutions Inc.
S
USA
100%
2006
Geometric Software Solutions Pte.
Ltd.
Global Edge Software Inc.
Globsyn Technologies, Inc
S
Singapore
100%
2006
S
S
USA
USA
100%
2006
2006
Primesoft LLC
S
USA
100%
2005
Staytop Systems Inc.
S
USA
100%
2005
HCL (Netherlands) BV
DSI Financial Solutions Pte. Limited [
S
S
Netherlands
Singapore
100%
100%
2006
2006
Name of Indian Parent Firm Name of Overseas Venture
Four Soft Ltd.
Four Soft Ltd.
Four Soft Ltd.
G T L Ltd.
G T L Ltd.
G T L Ltd.
G T L Ltd.
G T L Ltd.
G T L Ltd.
G T L Ltd.
G T L Ltd.
G T L Ltd.
G T L Ltd.
GAVS Information
Services Private Limited
GAVS Information
Services Private Limited
Genesys International
Corpn. Ltd.
Genesys International
Corpn. Ltd.
Genesys International
Corpn. Ltd.
Geodesic Information
Systems Ltd.
Geodesic Information
Systems Ltd.
Geodesic Information
Systems Ltd.
Geodesic Information
Systems Ltd.
Geometric Software
Solutions Co. Ltd.
Geometric Software
Solutions Co. Ltd.
Geometric Software
Solutions Co. Ltd.
Global Edge Software Ltd.
Globsyn Technologies
Ltd.
Goldstone Technologies
Ltd.
Goldstone Technologies
Ltd.
H C L Technologies Ltd.
H C L Technologies Ltd.
S / JV /
AC*
Country of
incorporation
Four Soft Singapore Pte Limited
Four Soft NL B.V.
Four Soft Malaysia Sdn Bhd
International Global Tele‐Systems
Limited
iGTL Solutions (Australia) Pty. Ltd.
iGTL Solutions (USA), Inc.
IGTL Solutions Lanka (Pvt.) Ltd.
IGTL Solutions (Saudi Arabia)
Limited
IGTL Solutions (UK) Limited
IGTL Solutions (s) Pte ltd.
IGTL Solutions Mauritius Limited
IGTL Solutions (Germany) GmbH
IGTL Solutions Middle East FZ LLC
GAVS Information Services LLC
S
S
S
S
GAVS Information Services Asia
(Pte) Ltd.
Genesys Enterprises Inc.
56
2006
2006
2006
2006
2006
Name of Indian Parent Firm Name of Overseas Venture
H C L Technologies Ltd.
H C L Technologies Ltd.
H C L Technologies Ltd.
H C L Technologies Ltd.
H C L Technologies Ltd.
H C L Technologies Ltd.
H C L Technologies Ltd.
H C L Technologies Ltd.
H C L Technologies Ltd.
H C L Technologies Ltd.
H C L Technologies Ltd.
H C L Technologies Ltd.
H C L Technologies Ltd.
H C L Technologies Ltd.
H C L Technologies Ltd.
H C L Technologies Ltd.
H C L Technologies Ltd.
H C L Technologies Ltd.
H C L Technologies Ltd.
H C L Technologies Ltd.
H C L Technologies Ltd.
H C L Technologies Ltd.
H C L Technologies Ltd.
H C L Technologies Ltd.
H C L Technologies Ltd.
H C L Technologies Ltd.
H C L Technologies Ltd.
H C L Technologies Ltd.
H C L Technologies Ltd.
Helios & Matheson
Information Technology
Ltd.
Helios & Matheson
Information Technology
Ltd.
Helios & Matheson
Information Technology
Ltd.
Helios & Matheson
Information Technology
Ltd.
Helios & Matheson
Information Technology
Ltd.
Hexaware Technologies
Ltd.
S / JV /
AC*
Country of
incorporation
%age of
equity
holding
100%
100%
100.00%
100%
100%
100%
100%
100%
Year of
the data
eServe Holdings Limited
HCL Bermuda Limited
HCL BPO Services (NI) Limited
HCL Enterprise Solutions Limited
HCL Japan Limited, Japan
HCL Great Britain Limited
HCL Venture Capital Limited
Infosystems Europe Limited, United
Kingdom
HCL Technologies (Mass.) Inc.
HCL Jones Technologies LLC
HCL Australia Services Pty. Limited
HCL Hong Kong SAR Limited
HCL Jones (Bermuda) Limited
HCL (New Zealand) Limited
S
S
S
S
S
S
S
S
Mauritius
Bermuda
UK
Mauritius
Japan
UK
Bermuda
UK
S
S
S
S
S
S
100%
51.00%
100%
100%
51%
100%
2006
2006
2006
2006
2006
2006
HCL Answerthink Inc.
HCL (Illinois) Inc.
HCL Belgium NV
HCL EAI Services Inc.
HCL GmbH
HCL Singapore Pte. Limited
HCL (Malaysia) Sdn. Bhd., Malaysia
HCL America Inc.
HCL Italy SLR
Insys Inc, Canada
HCL m.a. Limited
Infosystems Australia Pty. Limited
HCL Holdings GmbH
Aalayance (UK) Ltd
HCL Sweden AB
Helios &Matheson Inc.
JV
S
S
S
S
S
S
S
S
S
S
S
S
S
S
S
USA
USA
Australia
Hong Kong
Bermuda
New
Zealand
USA
USA
Belgium
USA
Germany
Singapore
Malaysia
USA
Italy
Canada
UK
Australia
Austria
UK
Sweden
USA
50%
100%
100%
58%
100.00%
100%
100%
100%
100%
100%
51%
100%
100%
58.09%
100%
100%
2006
2006
2006
2006
2006
2006
2006
2006
2006
2006
2006
2006
2006
2006
2006
2006
The Laxmi Group Inc
S
USA
51%
2006
Helios &Matheson(Singapore) Pte.
Ltd
S
Singapore
100%
2006
Maruthi Consulting Inc
S
USA
100%
2006
TACT, USA
S
USA
43%
2006
Hexaware Technologies Canada
Limited.
S
Canada
100%
2006
57
2006
2006
2006
2006
2006
2006
2006
2006
Year of
the data
USA
%age of
equity
holding
100%
S
UK
100%
2006
Hexaware Technologies Gmbh.
S
Germany
100%
2006
Hexaware Technologies Asia Pacific
Pte Limited.
Hexaware Technologies Inc.
S
Singapore
100%
2006
S
USA
100%
2006
HTMT Europe Limited
Hinduja TMT France
Source One HTMT Inc.
Customer Contact Centre Inc.
C‐Cubed B.V.
C‐Cubed ( Antilles ) N.V.
HTS China
S
S
S
S
S
S
S
UK
France
USA
Philippines
Netherlands
Netherlands
China
51.00%
51%
100%
100%
100%
100%
2006
2006
2006
2006
2006
2006
2006
HTS‐Brno
S
i‐flex solutions ltd.
i‐flex solutions b.v.
SuperSolutions Corporation
i‐flex solutions inc.
i‐flex solutions pte ltd
ISP Internet Mauritius Company
i‐flex America inc.
Equinox Corporation,
IBS Software Services Pty Ltd
S
S
S
S
S
S
S
S
S
Czech
Republic
UAE
Netherlands
USA
USA
Singapore
Mauritius
USA
USA
Australia
IBS Software Services (P) Ltd.
S
UAE
2006
IBS Software Services Americas, Inc.
S
USA
2006
Avient Solutions Ltd.
S
UK
2006
ISGN ‐ CA
MortgageHub, Inc.
ISGN ‐ UK
ISGN ‐ PA
ISGN ‐ Europe
ISGN ‐ Singapore
ISGN ‐ IA
ITC Infotech Denmark
ITC Infotech Ltd, UK
ITC Infotech (USA) Inc.
ITTI MA Inc.
ITTI FZ.
S
S
S
S
S
S
S
S
S
S
S
S
USA
USA
UK
USA
Ireland
Singapore
USA
Denmark
UK
USA
USA
UAE
2006
2006
2006
2006
2006
2006
2006
2006
2006
2006
2006
2006
Name of Indian Parent Firm Name of Overseas Venture
Hexaware Technologies
Ltd.
Hexaware Technologies
Ltd.
Hexaware Technologies
Ltd.
Hexaware Technologies
Ltd.
Hexaware Technologies
Ltd.
Hinduja T M T Ltd.
Hinduja T M T Ltd.
Hinduja T M T Ltd.
Hinduja T M T Ltd.
Hinduja T M T Ltd.
Hinduja T M T Ltd.
Honeywell Technology
Solutions Lab
Honeywell Technology
Solutions Lab
I‐Flex Solutions Ltd.
I‐Flex Solutions Ltd.
I‐Flex Solutions Ltd.
I‐Flex Solutions Ltd.
I‐Flex Solutions Ltd.
I‐Flex Solutions Ltd.
I‐Flex Solutions Ltd.
I‐Flex Solutions Ltd.
IBS Software Services (P)
Ltd
IBS Software Services (P)
Ltd
IBS Software Services (P)
Ltd
IBS Software Services (P)
Ltd
ISGN Technologies Ltd
ISGN Technologies Ltd
ISGN Technologies Ltd
ISGN Technologies Ltd
ISGN Technologies Ltd
ISGN Technologies Ltd
ISGN Technologies Ltd
ITC Infotech India Ltd
ITC Infotech India Ltd
ITC Infotech India Ltd
ITTI Pvt. Ltd.
ITTI Pvt. Ltd.
S / JV /
AC*
Country of
incorporation
Specsoft Consulting Inc.
S
Hexaware Technologies UK Ltd.
58
2006
2006
40%
100.00%
100%
100%
100%
100%
100%
100%
100%
100%
2005
2005
2005
2005
2005
2005
2005
2005
2006
Year of
the data
USA
%age of
equity
holding
100%
S
Canada
100%
2005
iGATE Global Solutions (Wuxi) Co.
Ltd.
iGATE Global Solutions Sdn. Bhd.
S
China
100%
2005
S
Malaysia
59%
2005
Mascot Systems GmbH
S
Germany
59%
2005
Symphoni Interactive LLC
S
USA
100%
2005
Quintant Corporation
S
USA
59%
2005
Quintant Ltd.
S
UK
100.00%
2005
Infinite Computer Solutions Sdn.
Bhd.
Infinite Computer Solutions Inc.
S
Malaysia
2006
S
USA
2006
Infinite Computer Solutions, China
S
China
2006
Infinite Computer Solutions Pte. Ltd
S
Singapore
2006
Infinite Computer Solutions, Hong
Kong
Infinite Computer Solutions Ltd.
S
Hong Kong
2006
S
UK
2006
Infomart Technologies
Infomart Asia Pacific Pte. Ltd
Progeon S.R.O.
S
S
S
72%
2006
2006
2006
S
USA
Singapore
Czech
Republic
Australia
100%
2006
S
China
100%
2006
S
S
S
USA
Netherlands
Canada
100%
100%
100%
2006
2006
2006
S
AC
S
S
S
S
S
USA
USA
UK
USA
UK
Germany
USA
100.00%
49%
100%
100.00%
100%
100%
2006
2006
2006
2006
2006
2006
2006
Name of Indian Parent Firm Name of Overseas Venture
Igate Global Solutions
Ltd.
Igate Global Solutions
Ltd.
Igate Global Solutions
Ltd.
Igate Global Solutions
Ltd.
Igate Global Solutions
Ltd.
Igate Global Solutions
Ltd.
Igate Global Solutions
Ltd.
Igate Global Solutions
Ltd.
Infinite Computer
Solutions (India) Pvt Ltd
Infinite Computer
Solutions (India) Pvt Ltd
Infinite Computer
Solutions (India) Pvt Ltd
Infinite Computer
Solutions (India) Pvt Ltd
Infinite Computer
Solutions (India) Pvt Ltd
Infinite Computer
Solutions (India) Pvt Ltd
Infomart (India) Pvt Ltd
Infomart (India) Pvt Ltd
Infosys Technologies Ltd.
S / JV /
AC*
Country of
incorporation
iGATE Global Solutions LLC
(formerly eJiva LLC)
Quintant Inc.
S
Infosys Technologies Ltd. Infosys Technologies (Australia), Pty.
Limited
Infosys Technologies Ltd. Infosys Technologies (Shanghai) Co.
Limited
Infosys Technologies Ltd. Infosys Consulting, Inc.
Infotech Enterprises Ltd. Infotech Enterprises Benelux, B.V
Infotech Enterprises Ltd. Infotech Software Solutions Canada
Inc.,
Infotech Enterprises Ltd. Vargis LLC
Infotech Enterprises Ltd. Infotech Aerospace Services Inc.
Infotech Enterprises Ltd. Mapcentric Consulting Limited
Infotech Enterprises Ltd. Infotech Enterprises America, Inc.
Infotech Enterprises Ltd. Infotech Enterprises Europe Limited
Infotech Enterprises Ltd. Infotech Enterprises GmBh.
Infovision Software Pvt. Transcription South Inc.
Ltd
59
2005
Name of Indian Parent Firm Name of Overseas Venture
Infovision Software Pvt.
Ltd
Insoft.com Pvt Ltd
Insoft.com Pvt Ltd
Insoft.com Pvt Ltd
Insoft.com Pvt Ltd
Insoft.com Pvt Ltd
Integra Software Services
Private Limited
Integrated Hitech Ltd.
Country of
incorporation
Choice Transcriptions Inc
S
USA
2006
Insoft The Netherlands
Insoft USA
Insoft Nordic
Insoft Belgium
Insoft France
Integra Software Services Inc.
S
S
S
S
S
S
Netherlands
USA
Denmark
Belgium
France
USA
2006
2006
2006
2006
2006
2006
S
USA
2005
S
S
Singapore
USA
2005
2006
S
USA
100%
2006
S
USA
100%
2006
S
S
S
S
Ireland
USA
UK
UAE
100%
100%
100%
2006
2006
2006
2006
S
Singapore
2006
S
Vietnam
2006
S
Indonesia
2006
S
Philippines
2006
S
USA
2006
S
UK
2006
JV
Germany
60%
2006
S
USA
90%
2006
S
USA
100%
2006
JV
UAE
S
UK
100%
2006
S
USA
100%
2006
S
USA
100%
2006
Integrated Hitech (America)
Corporation
Integrated Hitech Ltd.
Integrated Hitech Singapore Pte Ltd
Intergraph Consulting Pvt Intergraph Consulting Inc.
Ltd.
Intertec Communications De Two Forging P Ltd
Ltd.
Intertec Communications Intertec America Inc.
Ltd.
JK Technosoft Ltd.
JK Technosoft Ltd. Ireland
JK Technosoft Ltd.
Proserve Consulting Inc.
JK Technosoft Ltd.
JK Technosoft (UK) Ltd.
Java Softech Private
Prima Java Softech Fz ‐ LLC
Limited
Java Softech Private
JavaSoftech Singapore PTE Ltd
Limited
Java Softech Private
Java Viernam Co. Limited
Limited
Java Softech Private
PT JavaSoftech Indonesia
Limited
Java Softech Private
JSPL Philippines Inc.
Limited
Jopasana Software &
Jopasana Software & Systems (USA),
Systems Ltd.
LLC.
Jopasana Software &
Jopasana Software & Systems (UK)
Systems Ltd.
Ltd.
K P I T Cummins
KPIT Infosystems Gmbh
Infosystems Ltd.
K P I T Cummins
SolvCentral.com Inc.
Infosystems Ltd.
K P I T Cummins
Panex Consulting Inc.
Infosystems Ltd.
K P I T Cummins
KPIT Systems LLC
Infosystems Ltd.
K P I T Cummins
KPIT Infosystems Ltd.
Infosystems Ltd.
K P I T Cummins
KPIT Infosystems Inc
Infosystems Ltd.
Kale Consultants Ltd.
Kale Softech, Inc.
60
%age of
equity
holding
Year of
the data
S / JV /
AC*
2006
Name of Indian Parent Firm Name of Overseas Venture
Kale Consultants Ltd.
Kale Consultants Ltd.
Kale Consultants Ltd.
Kanika Infrastructure &
Power Ltd.
Kanika Infrastructure &
Power Ltd.
Kanika Infrastructure &
Power Ltd.
Kernex Microsystems
(India) Ltd.
Kirloskar Multimedia Ltd.
Larsen & Toubro Infotech
Ltd.
Megasoft Ltd.
Megasoft Ltd.
Megasoft Ltd.
Kale Consultants Australia Pty.
Limited
Kale Technologies Limited
Antah Kale Sdn. Bhd.
Kanika Infotech (Singapore) Pte. Ltd.
S
Australia
S
JV
S
UK
Malaysia
Singapore
100%
60%
100%
2006
2006
2005
Kanika Infotech (America) Inc.
S
USA
100%
2005
Kanika Infotech (UK) Ltd.
S
UK
100%
2005
Avant‐Garde Infosystems Inc
S
USA
100.00%
2006
S
S
USA
Canada
S
Germany
100%
S
USA
100%
2006
S
S
South Africa
UAE
100%
2006
2006
S
Oman
S
USA
100%
2006
S
S
USA
Mexico
100%
100%
2006
2006
S
S
S
Germany
UK
USA
100%
100.00%
100%
2006
2006
2006
S
S
S
S
S
S
AC
S
S
S
Mauritius
Malaysia
Germany
Singapore
UK
USA
USA
Netherlands
Singapore
New
Zealand
UK
Germany
USA
100%
100%
100%
100%
100.00%
100%
49%
100%
100%
100%
2006
2006
2006
2006
2006
2006
2006
2006
2006
2006
100.00%
100%
100%
2006
2006
2006
Megasoft Consultants Limited
Megasoft Consultants GmBH
Megasoft Consultants, Inc.
61
Country of
incorporation
Year of
the data
%age of
equity
holding
100%
Kirloskar Multimedia Inc.
LARSEN & TOUBRO
INFORMATION TECHNOLOGY
CANADA LTD.
Larsen & Toubro Infotech L& T Infotech GmbH
Ltd.
Larsen & Toubro Infotech GDA Technologies, Inc
Ltd.
Lifetree Convergence Ltd. Lifetree Convergence (Pty) Ltd
MEDICOM Solutions (P) OCS Healthcare Informatics FZ LLC
Ltd
MEDICOM Solutions (P) MEDICOM Solutions Middle East
Ltd
LLC
Maars Software
Hi‐Tech Software Services,Usa
International Ltd.
Mascon Global Ltd.
Mascon Global Technologies, Inc
Mascon Global Ltd.
Mascon Global Information de RL de
CV
Mascon Global Ltd.
Mascon Global GmbH
Mascon Global Ltd.
Mascon Global (Europe) Limited
Mascon Global Ltd.
International Software Consulting,
Inc
Mascon Global Ltd.
Mascon International Limited
Mastek Ltd.
Mastek MSC Software Sdn. Bhd.
Mastek Ltd.
Mastek GmbH
Mastek Ltd.
Mastek Asia Pacific Ltd.
Mastek Ltd.
Mastek (UK) Ltd.
Mastek Ltd.
MajescoMastek
Mastek Ltd.
Carretek LLC
Megasoft Ltd.
Megasoft Consultants BV
Megasoft Ltd.
Megasoft Consultants Pte Ltd
Megasoft Ltd.
Megasoft (NZ) Limited
S / JV /
AC*
S
S
S
2006
2006
2003
2006
Year of
the data
Australia
Malaysia
Germany
Hong Kong
Singapore
%age of
equity
holding
100%
100%
64%
100%
100%
S
UK
100%
2006
Melstar Inc.
S
USA
100%
2006
Linkhand Support Ltd.
S
UK
100%
2006
Melstar Deutschland GmbH
S
Germany
100%
2006
Melstar Ltd.
S
UK
100%
2006
Metalearn US LLC
S
USA
S
S
S
Bahrain
USA
Malaysia
S
S
S
Name of Indian Parent Firm Name of Overseas Venture
Megasoft Ltd.
Megasoft Ltd.
Megasoft Ltd.
Megasoft Ltd.
Melstar Information
Technologies Ltd.
Melstar Information
Technologies Ltd.
Melstar Information
Technologies Ltd.
Melstar Information
Technologies Ltd.
Melstar Information
Technologies Ltd.
Melstar Information
Technologies Ltd.
Metalearn Services Pvt.
Ltd.
Mindteck (India) Ltd.
Mindteck (India) Ltd.
Mindteck (India) Ltd.
S / JV /
AC*
Country of
incorporation
Megasoft Australia Pty Ltd
Megasoft Consultants Sdn Bhd
Beam AG
Megasoft (HK) Limited
Melstar Singapore Pte Ltd.
S
S
S
S
S
Melstar UK Ltd.
Mindteck Middle East SOC.
Mindteck USA Inc.
Mindteck Software Malaysia SDN,
BHD.
Mistral Software Pvt. Ltd. Mistral Software Inc.
Mistral Software Pvt. Ltd. Mistral Software Europe
Moschip Semiconductor Moschip Semiconductor Technology,
Technology Ltd.
Usa
Mphasis Ltd.
MsourcE Mauritius Inc.,
Mphasis Ltd.
Eldorado Computing Inc.
Mphasis Ltd.
MphasiS Europe BV
Mphasis Ltd.
MphasiS Ireland Limited
Mphasis Ltd.
MphasiS (Shanghai) Software &
Services Company Limited
Mphasis Ltd.
Princeton Consulting Limited
Mphasis Ltd.
MphasiS Australia Pty Ltd
Mphasis Ltd.
MsourcE Holdings BV,
Mphasis Ltd.
MbrokeR Inc.
Mphasis Ltd.
MphasiS UK Limited
Mphasis Ltd.
MphasiS Corporation
Mphasis Ltd.
BFL Software Asia Pacific Pte Ltd
Mphasis Ltd.
MphasiS Deutschland GmbH
Mphasis Ltd.
MphasiS Pte Ltd
N I I T Ltd.
NIIT USA Inc.
N I I T Ltd.
NIIT Malaysia Sdn Bhd
N I I T Ltd.
NIIT GC Ltd
N I I T Ltd.
NIIT Middle East WLL
N I I T Ltd.
PT NIIT Indonesia
N I I T Ltd.
NIIT China (Shanghai) Limited
N I I T Ltd.
NIIT Limited, UK
62
2006
2006
2006
2006
2006
2006
100%
100.00%
100%
2005
2005
2005
USA
Germany
USA
100%
2006
2006
2006
S
S
S
S
S
Mauritius
USA
Netherlands
Ireland
China
100%
100%
100%
100%
100%
2006
2006
2006
2006
2006
S
S
S
S
S
S
S
S
S
S
S
S
S
S
S
S
UK
Australia
Netherlands
USA
UK
USA
Singapore
Germany
Singapore
USA
Malaysia
Mauritius
Bahrain
Indonesia
China
UK
100%
100%
100%
100%
100%
100%
100%
91%
100%
100%
100%
100%
100%
100%
100%
100%
2006
2006
2006
2006
2006
2006
2006
2006
2006
2006
2006
2006
2006
2006
2006
2006
Year of
the data
China
%age of
equity
holding
100%
S
Netherlands
100%
2006
S
S
S
S
S
S
S
S
S
S
S
S
S
Austria
USA
UK
Thailand
UK
Belgium
Netherlands
Japan
Australia
Switzerland
Germany
Singapore
UAE
100%
100%
100%
100%
100%
99.96%
100%
100%
100%
100%
100%
100%
2006
2006
2006
2006
2006
2006
2006
2006
2006
2006
2006
2006
2006
NAVAYUGA INFOTECH LLC
S
USA
2006
NAVAYUGA EUROPE LIMITED
S
UK
2006
Neilsoft Inc.
Neilsoft Technologies Co. Ltd.
Neruby Consulting Services Ltd.
S
S
S
USA
China
UK
2006
2006
2006
ProSoft Technology Group, Inc.
S
USA
2006
NETTLINX INC.
NeST Canada Corporation
S
S
USA
Canada
NeST Technologies, Inc.
S
USA
2006
Ashling Microsystems Ltd.
S
Ireland
2006
Nihon NeST Corporation
S
Japan
2006
NeST Europe Ltd.
S
UK
2006
NeST Technologies MEA Fz Co
S
UAE
2006
NeST Solutions Pty Ltd
S
Australia
2006
Newgen Software Inc.
S
USA
2006
Winquest Consultants, Inc
Axill Inc, Usa
S
S
USA
USA
Name of Indian Parent Firm Name of Overseas Venture
N I I T Ltd.
N I I T Ltd.
N I I T Technologies Ltd.
N I I T Technologies Ltd.
N I I T Technologies Ltd.
N I I T Technologies Ltd.
N I I T Technologies Ltd.
N I I T Technologies Ltd.
N I I T Technologies Ltd.
N I I T Technologies Ltd.
N I I T Technologies Ltd.
N I I T Technologies Ltd.
N I I T Technologies Ltd.
N I I T Technologies Ltd.
Navayuga Infotech Pvt.
Ltd.
Navayuga Infotech Pvt.
Ltd.
Navayuga Infotech Pvt.
Ltd.
NeilSoft Limited
NeilSoft Limited
NetEdge Computing
Global Services Pvt Ltd
NetEdge Computing
Global Services Pvt Ltd
Nettlinx Ltd.
Network Systems &
Technologies (P) Ltd
Network Systems &
Technologies (P) Ltd
Network Systems &
Technologies (P) Ltd
Network Systems &
Technologies (P) Ltd
Network Systems &
Technologies (P) Ltd
Network Systems &
Technologies (P) Ltd
Network Systems &
Technologies (P) Ltd
Newgen Software
Technologies Ltd.
Nihar Info Global Ltd.
Northgate Technologies
Ltd.
PCEC NIIT Institute of Information
Technology
NIIT Antilles NV, Netherlands
Antilles
NIIT Technologies Gmbh, Osterreich
NIIT Technologies Inc., USA
NIIT Technologies Ltd.
NIIT Thailand Limited
NIIT Smart Serve Limited,
NIIT Belgium NV
NIIT Benelux BV
NIIT Technologies Co. Ltd.
NIIT Asia Pacific Pty Limited
NIIT Technologies AG, Schweiz
NIIT Technologies AG, Germany
NIIT Technologies Pte Ltd.
NAVAYUGA MIDDLE EAST FZC
63
S / JV /
AC*
Country of
incorporation
S
100.00%
100%
100%
2006
2006
2006
2006
2006
Name of Indian Parent Firm Name of Overseas Venture
Northgate Technologies
Ltd.
Northgate Technologies
Ltd.
Northgate Technologies
Ltd.
Northgate Technologies
Ltd.
NuNet Technologies
Private Limited
NuNet Technologies
Private Limited
Nucleus Software Exports
Ltd.
Nucleus Software Exports
Ltd.
Nucleus Software Exports
Ltd.
Nucleus Software Exports
Ltd.
Nucleus Software Exports
Ltd.
Nucleus Software Exports
Ltd.
Nucleus Software Exports
Ltd.
Ocimum Biosolutions Ltd.
Ocimum Biosolutions Ltd.
Olive Technology Limited
Olive e‐Business Pvt. Ltd.
Olive e‐Business Pvt. Ltd.
Olive e‐Business Pvt. Ltd.
Olive e‐Business Pvt. Ltd.
Ontrack Systems Ltd.
Ontrack Systems Ltd.
Ontrack Systems Ltd.
Ontrack Systems Ltd.
Onward Technologies
Ltd.
Onward Technologies
Ltd.
Orient Information
Technology Ltd.
Orient Information
Technology Ltd.
Orient Information
Technology Ltd.
Country of
incorporation
Globe 7 HK Limited
S
Hong Kong
Northgate Holdings (S) Pte. Ltd.
S
Singapore
Axill Europe Limited
S
UK
100%
2006
Globe7 Inc, Usa
S
USA
100%
2006
NuNet Technologies Pte Limited
S
Singapore
2006
NuNet Technologies Pty Ltd
S
Australia
2006
VirStra i ‐ Technology (Singapore)
Pte. Ltd.
Nucleus Software Solutions Pte. Ltd.
S
Singapore
100%
2006
S
Singapore
100%
2006
Nucleus Software Netherlands B.V.
S
Netherlands
100%
2006
Nucleus Software Japan Kabushiki
Kaiga
Nucleus Software (HK) Ltd.
S
Japan
100%
2006
S
Hong Kong
100%
2006
Nucleus Software Inc.
S
USA
100%
2006
Nucleus Software (Australia) Pty.
Ltd.
Isogen Biosolutions
Ocimum Biosolutions Inc.
Olive Technology, Inc.
Olive e‐Business
Olive Global Ltd.
Digital Touch LLC
Digital Touch Ebusiness
Ontrack Systems Inc.
Ontrack Systems (UAE) Ltd.
Ontrack Systems (UK) Ltd.
Ontrack Systems BV.,
NETHERLAND
Onward Technologies Inc.
S
Australia
100%
2006
S
S
S
S
S
S
S
S
S
S
S
Netherlands
USA
USA
Canada
UK
Oman
UAE
USA
UAE
UK
Netherlands
100.00%
100%
100%
51%
2006
2006
2006
2006
2006
2006
2006
2006
2006
2006
2006
S
USA
100%
2006
Onward Technologies GmbH
S
Germany
100%
2006
Information Technology People
WLL‐
Orient Information Technology Inc.
S
Bahrain
S
USA
100%
2005
S
UAE
100%
2005
Orient Information Technology FZ
LLC
64
%age of
equity
holding
100%
Year of
the data
S / JV /
AC*
2006
2006
2005
Year of
the data
UK
%age of
equity
holding
100%
S
Germany
100%
2005
S
S
S
S
S
100%
100%
100%
100%
100%
2006
2006
2006
2006
2006
S
S
USA
USA
USA
USA
New
Zealand
USA
UK
100%
100%
2006
2006
Reference Inc.
S
USA
100%
2006
Patni Computer Systems, Inc.
S
USA
100%
2006
Cymbal Information Services
(Thailand) Limited
Patni Computer Systems GmbH
S
Thailand
100%
2006
S
Germany
100%
2006
Patni Telecom Solutions (UK) Ltd.
S
UK
100%
2006
Patni Telecom Solutions Inc.
S
USA
100%
2006
Esoftcom Mauritius Ltd.,
S
Mauritius
100%
2006
Persistent Systems Inc.
S
USA
Polaris Software Lab S.A
Polaris Software Lab Canada Inc.
Polaris Software Lab Pte Ltd.
Polaris Software Lab Ltd.
Polaris Software Lab Ireland Ltd.
Polaris Software Lab Japan KK
Polaris Software Pty Ltd.
Polaris Software Lab GmbH
Prologic First Dubai
S
S
S
S
S
S
S
S
S
Switzerland
Canada
Singapore
UK
Ireland
Japan
Australia
Germany
UAE
WISH Technologies
S
China
2006
Quadrant Technologies Inc.
S
USA
2006
Quintegra Solutions Limited, UK
Quintegra Solutions, Inc
Quintegra Solutions GmbH
Quintegra Solutions Pte. Ltd
Quintegra Solutions (M) Sdn. Bhd
S
S
S
S
S
UK
USA
Germany
Singapore
Malaysia
2006
2006
2006
2006
2006
Name of Indian Parent Firm Name of Overseas Venture
Orient Information
Technology Ltd.
Orient Information
Technology Ltd.
Panoramic Universal Ltd.
Panoramic Universal Ltd.
Panoramic Universal Ltd.
Panoramic Universal Ltd.
Panoramic Universal Ltd.
Paradyne Infotech Ltd.
Patni Computer Systems
Ltd.
Patni Computer Systems
Ltd.
Patni Computer Systems
Ltd.
Patni Computer Systems
Ltd.
Patni Computer Systems
Ltd.
Patni Computer Systems
Ltd.
Patni Computer Systems
Ltd.
Pentasoft Technologies
Ltd.
Persistent Systems Pvt.
Ltd.
Polaris Software Lab Ltd.
Polaris Software Lab Ltd.
Polaris Software Lab Ltd.
Polaris Software Lab Ltd.
Polaris Software Lab Ltd.
Polaris Software Lab Ltd.
Polaris Software Lab Ltd.
Polaris Software Lab Ltd.
Prologic First India Pvt
Ltd.
Prologic First India Pvt
Ltd.
Quadrant Infotech (India)
Private Limited
Quintegra Solutions Ltd.
Quintegra Solutions Ltd.
Quintegra Solutions Ltd.
Quintegra Solutions Ltd.
Quintegra Solutions Ltd.
S / JV /
AC*
Country of
incorporation
Orient Infotech Limited‐UK
S
Orient Information Technology
GmbH‐
Panoramic Ace Properties Inc.
Georgian Motel Corp.
Sai Properties Inc.
Sai Living Hudson Inc.
Sai Motels Limited
Dyne Techservices Inc
Patni Computer Systems (UK) Ltd.
65
2005
2006
100%
100%
100%
100%
100%
100%
100%
100%
100%
2006
2006
2006
2006
2006
2006
2006
2006
2006
Year of
the data
UK
USA
Hong Kong
%age of
equity
holding
100.00%
100%
100.00%
S
Singapore
99%
2006
ECnet Inc.
S
USA
100%
2006
ECnet Systems (Thailand) Co. Ltd.
S
Thailand
100%
2006
ECnet (Taiwan) Co.
S
China
100%
2006
ECnet Korea Co, Ltd.
S
Korea
100%
2006
ECnet Kabushiki Kaisha
S
Japan
100.00%
2006
Indus Software Inc.
S
USA
100%
2006
R Systems Inc.
S
USA
100%
2006
ECnet (M) Sdn Bhd
S
Malaysia
100%
2006
ECnet (Shanghai) Co. Ltd.
S
China
100%
2006
R Systems (Singapore) Pte Limited
S
Singapore
100%
2006
Aravali Technologies Inc.
Ramco Systems Sdn Bhd.,
Ramco Systems Pte Ltd.,
Ramco Systems Ltd.,
Ramco Systems Corporation
RSL Enterprise Solutions (Pty) Ltd.,
Rave Technologies, USA
S
S
S
S
S
S
S
USA
Malaysia
Singapore
Switzerland
USA
South Africa
USA
100%
100%
100%
98%
100%
2006
2006
2006
2006
2006
2006
2006
Rave Technologies, Italy
S
Italy
2006
Rave Technologies, UK
S
UK
2006
Sytemart LLC
S
USA
2006
Rishabh InfoServices Pvt.Ltd.
S
UK
2006
Rolta Deutschland Gmbh
Rolta Benelux B.V.
Rolta Middleeast
Rolta International, inc
Rolta Saudi Arabia
S
S
S
S
S
Germany
Netherlands
UAE
USA
Saudi
Arabia
Name of Indian Parent Firm Name of Overseas Venture
R S Software (India) Ltd.
R S Software (India) Ltd.
R Systems International
Ltd.
R Systems International
Ltd.
R Systems International
Ltd.
R Systems International
Ltd.
R Systems International
Ltd.
R Systems International
Ltd.
R Systems International
Ltd.
R Systems International
Ltd.
R Systems International
Ltd.
R Systems International
Ltd.
R Systems International
Ltd.
R Systems International
Ltd.
Ram Informatics Ltd.
Ramco Systems Ltd.
Ramco Systems Ltd.
Ramco Systems Ltd.
Ramco Systems Ltd.
Ramco Systems Ltd.
Rave Technologies (India)
Pvt Ltd
Rave Technologies (India)
Pvt Ltd
Rave Technologies (India)
Pvt Ltd
Rishabh Software Pvt.
Ltd.
Rishabh Software Pvt.
Ltd.
Rolta India Ltd.
Rolta India Ltd.
Rolta India Ltd.
Rolta India Ltd.
Rolta India Ltd.
S / JV /
AC*
Country of
incorporation
RS Software UK Limited
Responsive Solutions Inc
ECnet (Hong Kong)
S
S
S
ECnet Limited
66
100%
100%
100%
100%
75%
2006
2006
2006
2006
2006
2006
2006
2006
Name of Indian Parent Firm Name of Overseas Venture
Rolta India Ltd.
Rolta India Ltd.
S Q L Star International
Ltd.
S Q L Star International
Ltd.
S Q L Star International
Ltd.
S S I Ltd.
Saksoft Ltd.
Saksoft Ltd.
Saksoft Ltd.
Sankhya Infotech Ltd.
Sasken Communication
Technologies Ltd.
Sasken Communication
Technologies Ltd.
Satyam Computer
Services Ltd.
Satyam Computer
Services Ltd.
Satyam Computer
Services Ltd.
Satyam Computer
Services Ltd.
Satyam Computer
Services Ltd.
Satyam Computer
Services Ltd.
Satyam Computer
Services Ltd.
Saven Technologies Ltd.
Saven Technologies Ltd.
Saven Technologies Ltd.
Serviont Global Solutions
Ltd.
Serviont Global Solutions
Ltd.
Serviont Global Solutions
Ltd.
Silverline Technologies
Ltd.
Silverline Technologies
Ltd.
Silverline Technologies
Ltd.
Softsol India Ltd.
Software Technology
Country of
incorporation
Rolta Canada Ltd
Rolta UK Ltd
SQL Star International, Inc
S
S
S
Canada
UK
USA
100.00%
100%
2006
2006
2006
International SQL Star Pte. Ltd,
S
Singapore
100%
2006
SQL Star International Ltd,
S
UK
100.00%
2006
Telephoto International Pte Ltd
Saksoft Pte Ltd
Saksoft Gmbh
Saksoft Inc USA
Sankhya SARL
Sasken Communication
Technologies Mexico, S.A.De C.V
Sasken Communication Technology
(Shanghai) Co. Ltd.,
Knowledge Dynamics USA Inc.
S
S
S
S
S
S
Singapore
Singapore
Germany
USA
France
Mexico
100%
100%
100%
100%
100%
100%
2006
2005
2005
2005
2006
2006
S
China
100%
2006
S
USA
98%
2006
Satyam Technologies, Inc.
S
USA
100%
2006
Info On Demand SDN BHD
S
Malaysia
100%
2006
Satyam Computer Services
(Shanghai) Co. Ltd.
Knowledge Dynamics Pte. Ltd
S
China
100%
2006
S
Singapore
100%
2006
Citisoft Inc.
S
USA
100%
2006
Citisoft Plc.
S
UK
75%
2006
Saven Technologies Inc.,
Saven Technologies (UK) Ltd.
Penrillian Limited,
5by5 Networks Inc.,
S
S
JV
S
USA
UK
UK
USA
Servion Global Solutions Inc.
S
USA
2006
Servion Global Solutions Pte Ltd.
S
Singapore
2006
SKY Capital International Ltd., HK
S
Hong Kong
2005
eComServer Inc. USA
S
USA
Innovative BPO Solutions ltd.,
Canada.
SoftSol Resources Inc.,
Software Technology Group
S
Canada
S
S
USA
USA
67
%age of
equity
holding
Year of
the data
S / JV /
AC*
100%
100%
2006
2006
2006
2006
2005
2005
100%
100%
2006
2006
S / JV /
AC*
Country of
incorporation
%age of
equity
holding
Year of
the data
International Inc
Software Technology Group, Inc.
S
USA
100%
2006
Abisko Development Ltd
Sonata Software GmbH
Offshore Digital Services Inc.
Spanco (S) Pte Ltd
S
S
S
S
Cyprus
Germany
USA
Singapore
80.10%
100%
100%
100%
2006
2006
2006
2006
Global Respondez Inc.
S
USA
50%
2006
IntelliApp Solutions Ltd.
Subex Technologies, Inc.
SunTec Business Solutions Ltd, UK
S
S
S
USA
USA
UK
100%
2006
2006
2006
SunTec Business Solutions,
Singapore
SunTec Business Solutions Inc
S
Singapore
2006
S
USA
2006
SunTec Business Solutions GmbH
S
Germany
2006
Synergy Log‐in Systems Sdn.Bhd
S
Malaysia
100%
2006
Synergy Information Technology Inc
S
USA
100.00%
2006
Globsyn Technologies Inc
S
USA
100%
2006
Sigmasoft Pte Ltd
S
Singapore
100%
2006
Tally Solutions FZ LLC.
Tally Solutions International Pte Ltd.
Tanla Solutions (UK) Limited
Mobizar Limited
Tarang Software Technologies Pte.
Ltd.
Tasaa Netcom USA, Inc.
S
S
S
S
S
UAE
Singapore
UK
UK
Japan
S
USA
Financial Network Services (H.K.)
Limited
Pentacrom Servicios S.A.
S
Hong Kong
100%
2006
S
Chile
100%
2006
Tata Consultancy Services Sverige
AB
Swedish Indian IT Resources AB
S
Sweden
100%
2006
S
Sweden
100%
2006
Tata Consultancy Services Solution
Center S.A.
TCS Argentina S.A.
S
Uruguay
100%
2006
S
Argentina
99%
2006
Name of Indian Parent Firm Name of Overseas Venture
Group International Ltd.
Software Technology
Group International Ltd.
Sonata Software Ltd.
Sonata Software Ltd.
Sonata Software Ltd.
Spanco Telesystems &
Solutions Ltd.
Spanco Telesystems &
Solutions Ltd.
Srishti Software Pvt. Ltd.
Subex Azure Ltd.
SunTec Business
Solutions Pvt. Ltd.
SunTec Business
Solutions Pvt. Ltd.
SunTec Business
Solutions Pvt. Ltd.
SunTec Business
Solutions Pvt. Ltd.
Synergy Log‐In Systems
Ltd.
Synergy Log‐In Systems
Ltd.
Synergy Log‐In Systems
Ltd.
Synergy Log‐In Systems
Ltd.
Tally ( India) Pvt. Ltd.
Tally ( India) Pvt. Ltd.
Tanla Solutions Ltd.
Tanla Solutions Ltd.
Tarang Software
Technologies Pvt Ltd.
Tasaa Netcom Private
Limited
Tata Consultancy Services
Ltd.
Tata Consultancy Services
Ltd.
Tata Consultancy Services
Ltd.
Tata Consultancy Services
Ltd.
Tata Consultancy Services
Ltd.
Tata Consultancy Services
Ltd.
68
100%
100%
2006
2006
2006
2006
2006
2006
Name of Indian Parent Firm Name of Overseas Venture
Tata Consultancy Services
Ltd.
Tata Consultancy Services
Ltd.
Tata Consultancy Services
Ltd.
Tata Consultancy Services
Ltd.
Tata Consultancy Services
Ltd.
Tata Consultancy Services
Ltd.
Tata Consultancy Services
Ltd.
Tata Consultancy Services
Ltd.
Tata Consultancy Services
Ltd.
Tata Consultancy Services
Ltd.
Tata Consultancy Services
Ltd.
Tata Consultancy Services
Ltd.
Tata Consultancy Services
Ltd.
Tata Consultancy Services
Ltd.
Tata Consultancy Services
Ltd.
Tata Consultancy Services
Ltd.
Tata Consultancy Services
Ltd.
Tata Consultancy Services
Ltd.
Tata Consultancy Services
Ltd.
Tata Consultancy Services
Ltd.
Tata Consultancy Services
Ltd.
Tata Consultancy Services
Ltd.
Tata Consultancy Services
Ltd.
Tata Consultancy Services
Ltd.
Tata Consultancy Services
Financial Network Services (Africa)
Pty Ltd
Tata Consultancy Services Do Brasil
S.A.
Tata Consultancy Services Chile S.A.
S
South Africa
S
Brazil
51%
2006
S
Chile
100%
2006
CMC Americas Inc.
S
USA
100%
2006
Chong Wan Investments Limited
S
Hong Kong
100%
2006
Tata Consultancy Services Japan
Limited
Tata Infotech (Singapore) Pte.
Limited
Tata Consultancy Services de Espana
S.A.
Exegenix Canada Inc.
S
Japan
100%
2006
S
Singapore
100%
2006
S
Spain
99%
2006
S
Canada
100%
2006
Tata Consultancy Services Belgium
S.A.
Sisteco S.A.
S
Belgium
100%
2006
S
Chile
100%
2006
Financial Network Services
(Facilities Management) Pty Limited
Financial Network Services Pty
Limited
Tata Infotech Deutscheland GmbH
S
Australia
100.00%
2006
S
Australia
100%
2006
S
Germany
100%
2006
TCS FNS Pty. Limited
S
Australia
100%
2006
Conscripti (Pty) Ltd.
AC
South Africa
20%
2006
Exegenix Research Inc.
AC
Canada
50%
2006
S
Portugal
100%
2006
S
Mexico
99%
2006
S
Chile
100%
2006
Tata Consultancy Services Asia
Pacific Pte Limited
PT Financial Network Services
S
Singapore
100%
2006
S
Indonesia
100%
2006
Tata Consultancy Services
Deutscheland GmbH
Tata Consultancy Services
Luxembourg S.A
Tata Consultancy Services Chile
S
Germany
100%
2006
S
Luxembourg
99%
2006
S
Chile
99%
2006
69
Country of
incorporation
Year of
the data
%age of
equity
holding
100%
Tata Consultancy Services Portugal
Unipesoal Limitada
Tata Consultancy Services de Mexico
S.A. De. C.V.
Pentacrom S.A.
S / JV /
AC*
2006
S / JV /
AC*
Country of
incorporation
%age of
equity
holding
Year of
the data
S
France
100%
2006
S
USA
100%
2006
S
Malaysia
100%
2006
S
China
100%
2006
S
Australia
100%
2006
S
Netherlands
100%
2006
S
Chile
100%
2006
S
UK
100%
2006
S
Malaysia
100%
2006
S
Chile
100%
2006
S
Uruguay
100%
2006
Diligenta Limited
S
UK
76%
2006
TCS Brazil S/C Limitada
S
Brazil
99.99%
2006
TCS Italia SRL
S
Italy
100%
2006
TCS Inversiones Chile Limitada
S
Chile
99.99%
2006
Comicrom S.A.
S
Chile
100%
2006
S
S
S
S
S
S
USA
Netherlands
Germany
Thailand
UK
Singapore
100%
100%
2005
2006
2006
2006
2006
2006
S
S
S
S
S
S
S
S
USA
Singapore
Germany
USA
Thailand
USA
Ireland
USA
100%
100%
100%
100%
100%
100%
60%
100.00%
2006
2006
2006
2006
2006
2006
2006
2006
Name of Indian Parent Firm Name of Overseas Venture
Ltd.
Tata Consultancy Services
Ltd.
Tata Consultancy Services
Ltd.
Tata Consultancy Services
Ltd.
Tata Consultancy Services
Ltd.
Tata Consultancy Services
Ltd.
Tata Consultancy Services
Ltd.
Tata Consultancy Services
Ltd.
Tata Consultancy Services
Ltd.
Tata Consultancy Services
Ltd.
Tata Consultancy Services
Ltd.
Tata Consultancy Services
Ltd.
Tata Consultancy Services
Ltd.
Tata Consultancy Services
Ltd.
Tata Consultancy Services
Ltd.
Tata Consultancy Services
Ltd.
Tata Consultancy Services
Ltd.
Tata Technologies Ltd.
Tata Technologies Ltd.
Tata Technologies Ltd.
Tata Technologies Ltd.
Tata Technologies Ltd.
Tech Mahindra Ltd.
Limitada
Tata Consultancy Services France
S.A.
Tata America International
Corporation
Financial Network Services Malaysia
Sdn Bhd
Tata Information Technology
(Shanghai) Company Limited
Financial Network Services
(Holdings) Pty Limited
Tata Consultancy Services
Netherlands B.V.
Syscrom S.A.
Financial Network Services (Europe)
plc
Tata Consultancy Services Malaysia
SDN. BHD.
Custodia De Documentos Intres
Limitada
TCS Iberoamerica S.A.
TATA TECHNOLOGIES U S A
INCAT Engineering Solutions BV
INCAT GmbH
Tata Technologies (Thailand) Ltd
Tata Technologies Pte. Ltd
Tech Mahindra (R & D Services) Pte.
Ltd
Tech Mahindra Ltd.
Tech Mahindra (Americas) Inc.
Tech Mahindra Ltd.
Tech Mahindra (Singapore) Pte. Ltd.
Tech Mahindra Ltd.
Tech Mahindra GmbH
Tech Mahindra Ltd.
Tech Mahindra (R & D Services) Inc.
Tech Mahindra Ltd.
Tech Mahindra (Thailand) Limited
Teledata Informatics Ltd. Alpha Soft Services Corporation
Teledata Informatics Ltd. SBC Data Systems Limited,
Teledata Informatics Ltd. Vanguard Technologies
70
Name of Indian Parent Firm Name of Overseas Venture
Teledata Informatics Ltd. Transworld Information Systems
Inc.,
Teledata Informatics Ltd. Nemera International Company Ltd;
Teledata Informatics Ltd. Data Methods USA
Teledata Informatics Ltd. Teledata Informatics (Bangkok ) Co.
Ltd
Teledata Informatics Ltd. Insoft Systems Ltd;
Teledata Informatics Ltd. Bitech International Pte Ltd.,
Teledata Informatics Ltd. Teledata Marine Systems Pte, Ltd,
Teledata Informatics Ltd. Hopway Limited
Teledata Informatics Ltd. Picnic Marine Company Ltd;
Teledata Informatics Ltd. Bitech International LLC, Dubai
Teledata Informatics Ltd. I‐Max Communications Ltd,
Teledata Informatics Ltd. Netsol Technologies Company.
Limited
Thirdware Solution Ltd. Thirdware Ireland Limited
Thirdware Solution Ltd. Thirdware Solution Deutschland
GmbH
Thirdware Solution Ltd. Thirdware Solution Inc.
Thirdware Solution Ltd. Thirdware Solution Europe Ltd.
Thirdware Solution Ltd. Thirdware Solution Singapore Pte.
Trident Info‐Tech Corpn. Trident Info.Inc.
Ltd.
Trigent Software Ltd.
Trigent Software, Inc.
Trigyn Technologies Ltd. Trigyn Technologies Inc.
Trigyn Technologies Ltd. eCapital Solutions (Bermuda)
Limited
Trigyn Technologies Ltd. eVector (Cayman) Limited
Trigyn Technologies Ltd. Trigyn Technologies Limited, UK
Trigyn Technologies Ltd. EVector Inc.
Trigyn Technologies Ltd. eCapital Solutions (Mauritius)
Limited
Trigyn Technologies Ltd. Applisoft, Inc.
Trigyn Technologies Ltd. EVector (UK) Limited
Trigyn Technologies Ltd. Trigyn Technologies Europe Gmbh,
Tutis Technologies Ltd.
Amex Information Technologies
GmbH
Tutis Technologies Ltd.
Global Software Technologies Ltd.
Twinstar Software
Twinstar Software Inc
Exports Ltd.
Twinstar Software
Twinstar Software Exports Limited,
Exports Ltd.
UK
Unisoft Infotech Pvt Ltd. Unisoft Infotech Inc
Unisoft Infotech Pvt Ltd. Unisoft Infotech Pte Ltd
Unisoft Infotech Pvt Ltd. Unisoft Infotech Pty Ltd
Unisoft Infotech Pvt Ltd. Unisoft Infotech Sdn Bhd
Unitex Designs Ltd.
Futur I Tech Inc Usa
71
Year of
the data
USA
%age of
equity
holding
53%
S
S
S
Thailand
USA
Thailand
100%
100%
100%
2006
2006
2006
S
S
AC
S
S
S
S
S
Singapore
Singapore
Singapore
Hong Kong
Thailand
UAE
UK
Thailand
100%
51%
26%
100%
70%
100%
80%
100%
2006
2006
2006
2006
2006
2006
2006
2006
S
S
Ireland
Germany
2006
2006
S
S
S
S
USA
UK
Singapore
USA
2006
2006
2006
2006
S
S
S
USA
USA
Bermuda
100.00%
100%
100%
2003
2006
2006
S
100%
2006
S
S
S
Cayman
Island
UK
USA
Mauritius
100.00%
100%
100%
2006
2006
2006
S
S
S
S
USA
UK
Germany
Germany
100%
100%
100%
100%
2006
2006
2006
2006
S
S
UK
USA
100%
2006
2006
S
UK
100%
2006
S
S
S
S
S
USA
Singapore
Australia
Malaysia
USA
S / JV /
AC*
Country of
incorporation
S
2006
2006
2006
2006
2006
2006
Name of Indian Parent Firm Name of Overseas Venture
Country of
incorporation
Usha Martin Infotech Ltd. Usha Communications Technology
Limtied
S
ValueLabs (India)
ValueLabs (India)
Wipro Ltd.
Wipro Ltd.
Wipro Ltd.
Wipro Ltd.
Wipro Ltd.
Wipro Ltd.
Wipro Ltd.
Wipro Ltd.
Wipro Ltd.
Wipro Ltd.
Wipro Ltd.
Wipro Ltd.
Wipro Ltd.
S
S
S
S
S
S
S
S
S
S
S
S
S
S
S
British
Virgin
Island
USA
Malaysia
USA
USA
UK
France
China
Mauritius
UK
USA
USA
Japan
USA
Austria
Austria
S
S
S
S
S
Switzerland
Singapore
UK
USA
China
100%
100%
100%
2006
2006
2006
2006
2006
S
S
S
Germany
USA
Singapore
100%
100%
100%
2006
2006
2006
S
S
S
S
USA
UK
USA
UK
100%
100%
2006
2006
2006
2006
ValueLabs,Inc.
ValueLabs Sdn. Bhd.
Enthink Inc.
mPower Software Services Inc
Wipro Holdings (UK) Limited
New Logic Technologies SARL
Wipro Shanghai Limited
Wipro Holdings (Mauritius) Limited
Wipro Technologies UK Limited
Wipro Inc
Spectramind Inc
Wipro Japan KK
New Logic Technologies Inc
New Logic Technologies AG
BVPENTE Beteiligungsverwaltung
GmbH
Wipro Ltd.
New Logic Technologies SA
Zenith Infotech Ltd.
Zenith Infotech (Singapore) Pte Ltd
Zenith Software Ltd.
Zenith Software (UK) Ltd.
Zenith Software Ltd.
Zenith Software, Inc.
Zensar Technologies Ltd. Zensar Technologies(Shenzhen)
Limited
Zensar Technologies Ltd. Zensar Technologies, GmbH
Zensar Technologies Ltd. OBT Global Inc
Zensar Technologies Ltd. Zensar Technologies (Singapore) Pte
Ltd.
Zensar Technologies Ltd. Zensar Technologies Inc.
Zensar Technologies Ltd. Zensar Technologies (UK) Ltd.
softProjex Ltd.
softProjex Inc.
softProjex Ltd.
softProjex (UK) Ltd.
Note: * S: Subsidiary; JV: Joint Venture; AC: Associate Company
72
%age of
equity
holding
Year of
the data
S / JV /
AC*
2006
100%
100%
100%
100%
100%
100%
100%
100.00%
100%
100%
100%
100%
2006
2006
2006
2006
2006
2006
2006
2006
2006
2006
2006
2006
2006
2006
2006
List of ISID Working Papers
WP2007/08
Estimates of Import Intensity in India’s Manufacturing Sector: Recent Trends
and Dimensions, T P Bhat, Atulan Guha, Mahua Paul and Partha Pratim Sahu.
WP2007/07
How do Indian Multinationals Affect Exports from Home Country?, Jaya
Prakash Pradhan.
WP2007/06
Five years of China in WTO: An Assessment, T P Bhat.
WP2007/05
Expanding Productive Employment Opportunities: Role and Potential of the
Micro and Small Enterprises Sector, Partha Pratim Sahu.
WP2007/04
Growth of Indian Multinationals in the World Economy: Implications for
Development, Jaya Prakash Pradhan.
WP2007/03
Tata Steelʹs Romance with Orissa: Minerals‐based Underdevelopment and
Federal Politics in India, Jaya Prakash Pradhan.
WP2007/02
New Policy Regime and Small Pharmaceutical Firms in India, Jaya Prakash
Pradhan.
WP2007/01
Subcontracting in India’s Small Manufacturing Enterprises: Problems and
Prospects, Partha Pratim Sahu.
WP2006/11
Quality of Foreign Direct Investment, Knowledge Spillovers and Host
Country Productivity: A Framework of Analysis, Jaya Prakash Pradhan.
WP2006/10
The Indian Stock Market in 2005–06: An Examination of Two Major Events,
K S Chalapati Rao and K V K Ranganathan.
WP2006/09
Ownership Pattern of the Indian Corporate Sector: Implications for
Corporate Governance, K S Chalapati Rao and Atulan Guha.
WP2006/08
Export‐orientation of Foreign Manufacturing affiliates in India: Factors,
Tendencies and Implications, Jaya Prakash Pradhan, Keshab Das and Mahua
Paul.
WP2006/07
Overseas Acquisition Versus Greenfield Foreign Investment: Which
Internationalization Strategy is better for Indian Pharmaceutical Enterprises?
Jaya Prakash Pradhan and Abhinav Alakshendra.
WP2006/06
Some features of Migration and Labour Mobility in the Leather Accessories
Manufacture in India: A Study of the Informal Sector Industry in Dharavi,
Mumbai, Jesim Pais.
WP2006/05
Global Competitiveness of Indian Pharmaceutical Industry: Trends and
Strategies, Jaya Prakash Pradhan.
WP2006/04
Tourism Employment: An Analysis of Foreign Tourism in India, Jesim Pais.
WP2006/03
Adoption of Improved Technology in India’s Small‐scale Industries:
Evidences from a Field Survey, Partha Pratim Sahu.
WP2006/02
Strengthening Intellectual Property Rights Globally: Impact on India’s
73
Pharmaceutical Exports, Jaya Prakash Pradhan.
WP2006/01
Towards Understanding the State‐wise Distribution of Foreign Direct
Investments in the Post‐Liberalisation Period, K S Chalapati Rao and M R
Murthy.
WP2005/03*
Indian Stock Market: 2004–05—Some Issues, K S Chalapati Rao and K V K
Ranganathan.
WP2005/02*
Workers in a Globalising World: Some Perspectives from India, T S Papola.
WP2005/01
Emerging Structure of Indian Economy: Implications of Growing Inter‐
sectoral Imbalances, T S Papola.
WP2004/13
Economic History of Tobacco Production in India, S K Goyal, Pratap C Biswal
and K V K Ranganathan.
WP2004/12
Potential Impact of Supply‐side Actions, S K Goyal, Pratap C Biswal and K V K
Ranganathan.
WP2004/11*
Is Growth Sans Industrialisation Substainable? ISID Foundation Day
Lecture, G S Bhalla.
WP2004/10
Labour: Down and Out, T S Papola and A N Sharma.
WP2004/09*
Foreign Trade Policy: Content and Coverage, T P Bhat.
WP2004/08*
National Trade Policy: What it Implies? T P Bhat.
WP2004/07*
WTO Negotiations Back on Track, T P Bhat.
WP2004/06*
Chinese Perspective of Bilateral Trade with India, T P Bhat.
WP2004/05*
A Challenge for Social Scientist, S K Goyal.
WP2004/04*
Foreign Portfolio Investments and the Indian Stock Market Boom of 2003–04:
A Note, K S Chalapati Rao.
WP2004/03*
Wavelet Analysis of the Bombay Stock Exchange Index, Pratap C Biswal, B
Kammaiah and Prasanta K Panigrahi.
WP2004/02
Company Size and Effective Corporate Tax Rate: A Study on Indian Private
Manufacturing Companies, Atulan Guha.
WP2004/01*
Anti‐dumping—Containment and Reform, T P Bhat.
WP2003/10*
Government Procurement Agreement: Negotiating Position for India, T P
Bhat.
WP2003/09*
Heralding of Asian Giant Trade Block, T P Bhat.
WP2003/08*
China the Victim of Anti‐dumping Action, T P Bhat.
WP2003/07*
Cost of Public Holidays, T P Bhat.
WP2003/06*
India and China on New Horizon, T P Bhat.
*
Already Published. Most of the working papers are downloadable from the institute’s website:
http://isidev.nic.in/ or http://isid.org.in/
74
About the ISID
The Institute for Studies in Industrial Development (ISID), successor to the Corporate Studies
Group (CSG), is a national-level policy research organization in the public domain and is affiliated
to the Indian Council of Social Science Research (ICSSR). Developing on the initial strength of
studying India’s industrial regulations, ISID has gained varied expertise in the analysis of the
issues thrown up by the changing policy environment. The Institute’s research and academic
activities are organized under the following broad thematic areas:
Industrial Development: Complementarity and performance of different sectors (public, private,
FDI, cooperative, SMEs, etc.); trends, structures and performance of Indian industries in the
context of globalisation; locational aspects of industry in the context of balanced regional
development.
Corporate Sector: Ownership structures; finance; mergers and acquisitions; efficacy of regulatory
systems and other means of policy intervention; trends and changes in the Indian corporate
sector in the background of global developments in corporate governance, integration and
competitiveness.
Trade, Investment and Technology: Trade policy reforms, WTO, composition and direction of
trade, import intensity of exports, regional and bilateral trade, foreign investment, technology
imports, R&D and patents.
Employment, Labour and Social Sector: Growth and structure of employment; impact of economic
reforms and globalisation; trade and employment, labour regulation, social protection, health,
education, etc.
Media Studies: Use of modern multimedia techniques for effective, wider and focused dissemination
of social science research and promote public debates.
ISID has developed databases on various aspects of the Indian economy, particularly concerning
industry and the corporate sector. It has created On-line Indexes of Indian Social Science
Journals (OLI) and Press Clippings on diverse social science subjects. These have been widely
acclaimed as valuable sources of information for researchers studying India’s socio-economic
development.
Institute for Studies in Industrial Development
4, Institutional Area, Vasant Kunj, New Delhi - 110 070, India
Phone: +91 11 2689 1111; Fax: +91 11 2612 2448
E-mail: info@vidur.delhi.nic.in; Website: <http://isid.org.in>
ISID
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