India’s IT services industry at this time every year patiently waits for the discharge of the budgets of its western clients, government, banks and manufacturers that will decide with their business over the promising year. In a different way, they are hoping for the occurrence of stability to Europe and apart from that they have been attentively and precisely inspecting the tentative recovery of the United States economy. However, commercial property is another Indian industry that is much inclined on the innovation of the global market. Still they are hoping to make a comeback in the global economy after the miserable 2011.
Based on the property consultancy, Jones Lang LaSalle, last year, 14 percent of space was occupied by European while 48 percent belongs to the United States compared to 27 percent of Indian industry. Commercial office space in India depends on rent out from foreign companies such as those that operate their own back offices in the region and some customers of Information Technology industry, but most domestic companies inclined to own instead of renting. The chairman and country head for Jones Lang LaSalle, Anuj Puri stated that in the Indian office real estate markets, United States was dominated. Despite the fact that it has been dropping regularly over the past years, analysts estimated between 35 and 60 percent was the share of the market held by local and international IT services. The 2008 financial crisis was the example offered by Mr. Puri on how global changes can paralyzed the country’s commercial real estate market.
Anurag Mathur, country head for India at Cushman & Wakefield, a property company claims that each countries in Asia have their own dynamic. Japan, China, Singapore and other countries are different from each other, but in some cases like in the level of dependence, India is possibly larger than anywhere else with the exclusion of the Philippines that is heavily possessed by foreign industry particularly in offshoring.
Few years ago, one advantage that India has is that it operate as a research and development and innovation hub for foreign companies. That kind of services are frequently reduce during difficult times but as foreign economies improve and recover it can easily come back and grow much better. Mathur added that when the global markets regain and win back, countries like India will definitely gain from that since there is already a large focus on working on technology and doing the foundation development work in India. In 2012, R&D may start to pay dividends as the eurozone moves toward stability and the United States economy increases.
More than half of its value has lost on Bombay Stock Exchange’s realty index and more than double the decrease in the Sensex. Real estate analyst at MF Global in India Dipesh Sohani said that those kind of challenges keeps developers in a precarious position but the situation can start to regain in the second half of 2012. In March 2013, the IT industry is set to grow 11-14 percent in the financial year, below from 17 cent in the last five years. India has become an R&D hub for some companies such as Accenture, IBM and other global service providers according to Som Mittal, president of NASSCOM.
REFERENCES:
http://www.indianexpress.com/news/outsourcing-space-indias-hopes-rest-on-its-r&d-hub-status/920059/0
http://www.ft.com/cms/s/0/85e123aa-5d76-11e1-8bb6-00144feabdc0.html#axzz1osKV73G7
http://globalizationtoday.com/outsourcing-space-indias-hopes-rest-on-its-rd-hub-status-financial-times/
http://worldonthisday.blogspot.com/2012/03/outsourcing-space-indias-hopes-rest-on.html
