While
the political leaders of India and China talk about the need to forge
closer links, their technology industries are doing just that.
Newgen Software Technologies, a leading Indian software company, has just signed a deal with Sinosoft Technology, a Chinese software developer listed on London's Aim market.
Sinosoft specialises in export tax software, which it is currently rolling out to China's tax departments -- see this EngagingChina story. Newgen's speciality is business process management software, so there are obvious synergies between the two companies.According to the Hindu Business Line, the Indian company is likely to offer licensing rights of its BPM software as well as customise it for Sinosoft.
Newgen has also signed an agreement with Digital China, a HK-listed IT services company which was spun off from Lenovo. The Indian company, which claims to have invested $250,000 last year in building its Chinese presence, has localised its software for the Chinese market and is now looking for customers in the Shanghai area in verticals such as banking, insurance and government.
Hi-tech trade links between India and China are still relatively rare, not least because the two countries have shared many years of mutual mistrust.
Hence this week's visit to India by Chinese president Hu Jintao, who called for a free-trade agreement between China and India to boost bilateral trade.
Hu, who was accompanied to the summit by a 120-strong business delegation, said he wanted to chart a new course in bilateral relations, which the New York Times dubbed "Hindi Chini Bhai Bhai" -- Indians and Chinese are brothers.
The two nations, which contain a third of the world's population, have agreed to double trade to $40bn billion by 2010 and speed up efforts to resolve the border row that saw them go to war in 1962.
Despite the fine words, there remain big obstacles to trade, particularly for Chinese companies seeking to invest in India. The BBC has a profile of the Indian operations of Huawei, the Chinese telecoms equipment manufacturer, which is expanding rapidly overseas. Its R&D facility in Bangalore employs more than 1,000 people, 95% of which are Indian.
The company has also brought key staff from China and to make their lives easier it provides a Chinese chef, television channels from China and even table tennis facilities.
But Huawei says that expansion has not been easy. Obtaining visas for its Chinese engineers to work on long-term projects in India being a particular challenge. Trying to get a manufacturing licence in India is also proving tough. Huawei has applied twice in the last two years but has yet to win approval.
Many western commentators write about China and India as if the two countries were engaged in a zero-sum game -- the success of one inevitably comes at the expense of the other. To do so misses the point, I feel. Each country has its particular strengths and weaknesses, which western firms are going to weigh up pretty carefully before opting for one over another.
Nevertheless, there is no reason why the choice has to be so stark. Indeed, splitting new investment or a batch of orders between both countries makes a lot of sense from the risk management perspective.
Indeed, Indian outsourcing companies like Satyam are doing just that, investing in outsourcing facilities in China to reduce the strain on their resources back home.
Chinalawblog explores this idea of Chinese and Indian collaboration-- sometimes dubbed "Chindia" -- in more detail.
More on President Hu's Indian trip in this New York Times article and this Financial Times story.
