In a recent decision to make acute financial repercussions of the COVID-19 pandemic less stressful for the companies operating in the STPI CEnters across India, the official New Delhi has announced it will waive off the rent that’s being paid by the IT and ITeS companies from March 1, 2020, till June 30, 2020 – a total of four months.
This is seen as the Indian government’s increased focus on the tech industry that’s been expanding its presence in the country over recent years. In fact, some go as far as suggesting that India is likely going to become the next Silicon Valley in the region, if not in the world.
From the outsourcing past to the new future
For the longest time ever, an Indian tech professional was considered someone whose skills were used for solving various newly-emerged problems. In short, the Indian technology sector was considered reactive and focused on outsourcing.
However, during the recent couple of years, many countries started moving away from being dependent on outsourcing providers like India and creating a self-sufficient problem-solving environment within their borders. This is true for such tech giants as the US and China.
These developments led to the weakening of India’s posture as an outsourcing hub of the world. But many analysts suggest that this can actually prove beneficial to the country’s tech industry as a whole.
India as the next Silicon Valley
Considering the current situation in the country, these analysts are positive the next technological revolution will fire off from India. And there are several reasons why this might be true:
On the one hand, the technological infrastructure is already pretty sophisticated in the country. As of today, India is the second-most connected country in the world after China. With its 560 million online user base, India has the potential for creating a tech sector that is both innovative and self-sufficient all at the same time.
The user base so large allows various sectors to output products and services that can be used within the country. There’s no need for export in any other country. One sector that has greatly utilized this phenomenon is iGaming. Being able to provide casino service that can easily be “sold” within the country allows the casino providers to create more content specifically designed for Indian gamers.
For that reason, if an Indian gamer wants to play casino online for real money in India, the selection of native gambling operators is huge and diverse. And with their 24/7 network connection via their smartphones, there’s literally no time when they’re away from global developments and events occurring in various industries, be it gambling, tech, finances, or anywhere else.
Not only that, but the startup sector is also pretty well-developed in the country. In fact, according to another rating system, India has the third-largest startup sector in the world, having more than 20 startups valued over $1 billion each. This level of development, in turn, encourages people to pursue a career in digital entrepreneurship, which takes the sector to the next level of development.
And finally, there’s the government involvement in the whole process. Having various startup-related departments like Make in India, the country is actively incentivizing the growth of the private tech sector that boosts India’s posture as a technological superpower of the world.
The Indian government offering concessions to tech companies
So, with these preconditions, we come to the conclusion that the Indian government can and is definitely focusing on the development of the tech sector in the country. The recent announcement to waive off the regular rent for the IT and ITeS companies for a four-month period is an indication of that.
According to Ravi Shankar Prasad, the union minister of electronics and IT of India, those companies/startups that operate from 60 STPI (Software Technology Parks of India) Centers will have their regular rent waived off from 01.03.2020 until 30.06.2020. As Prasad puts it, this concession will be beneficial for almost 200 companies that create more than 3,000 jobs in the country. In total, the rental waiver will cost the Indian budget some Rs 5 Crore, which is about 650,000 US dollars – a very small cost compared to the benefit it brings.
Another announcement from the Press Information Bureau of the STPI Center, this initiative is a great way of alleviating the grave pressure the IT companies have found themselves in during the COVID-19 pandemic. By laying off their rents for the next four months, these companies will be able to get out of the crisis relatively unharmed, being able to maintain their innovativeness, as well as the workforce that combines around 3,000 IT/ITeS employees across the country.
In short, the government of India is grasping the opportunity posed by its technology sector. With its recent decision to waive off the rents to the tech companies, it allows the sector to overcome the barricades of the Coronavirus pandemic and come out of it stronger than it entered it.