Official sources here believe that the recent slapping down of more than 35 percent income tax on foreign firms in the Indian silicone industry will help steer Pakistan's IT exporters to the mainstream of world market. New Delhi's action has prompted the General Electric in India to sell off its assets and some believe more firms, mainly Americans, may follow the lead.
The private and public sector IT experts here believe that the time for Pakistan's investments for raising "a modern and highly productive labour force" to pay off is in sight for some time but the Indian action has brought it within reach. And what may spur it will be the easy familiarity with Pakistan's most western, especially the American IT users already have because Islamabad's increasingly important ploy in the global economy.
The Indian move, made some five weeks ago, put all foreign firms with software, research and development and customer service operations, under the new tax slab. This development has not been sudden but had been looming over the foreign holdings for quite some time.
But the reports from New Delhi say it is not the end: the government plans to tax activities conducted under/over international private leased connections (IPLCs) which carry most of India's voice and data traffic to and from outside world, and also to replace local octroi duties with a national value-added tax.
Both these proposals could be combined into a single scheme. This may become the last straw on the camel's back and many hesitants, including Bill Gates's Microsoft giant, poised to put in a few billions of dollars in R & D investment in the Silicone Valley, may be among the foreign holdings to have a hasty review of its plans.
Unless revised, the Indian action makes Pakistan the primary beneficiary. It is because no other economy, as local as well as foreign, trade sources believe, can "match Pakistan's labour pool of educated English-speaking workers, its scalability, reliability and low-cost environment".
Anthony Mitchell, who has been involved with Indian IT industry since 1987, agrees with the view but believes that Pakistan has to move faster, pressing into service its knowledge of western markets, professionalism, language skills, accents, low costs of its talent pool and higher labour availability.
The new avenues in exports and investments from abroad which the situation may throw open to Pakistan's software firms will be a matter of extreme satisfaction for Professor Atta-ur-Rahman whose tenure as a guiding force behind development and expansion of information technology during last five years has brought the country to the take-off point. And, now, it is for the industry itself to move out and capture the opportunities international IT market beckons to it.
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