Mr Maran also urged the Japanese government to reduce the withholding tax. In this years budget, we have reduced the withholding tax to 10%. Once the Japanese government also slashes the withholding tax on Indias export of software products to Japan, it will help a large number of Indian software companies, he said.
Mr Maran and Kozo Takaharasan, vice minister for international affairs, Japan, said that the relationship between India and Japan in the Information and Communication Technology (ICT) sector was steadily growing. India and Japan had recently signed an ICT co-operation agreement. Mr Takaharasan, said, A few weeks ago an India-Japan ICT forum was established by the Japanese ICT companies who are interested in doing business with India in the ICT sector..
Mr Maran said that bridging the rural-urban digital divide in the country could generate business worth trillions of dollars. Our goal is to go beyond software exports and outsourcing. We want to connect villages, blocks, municipalities and corporation. This will plug the rural-urban divide and generate new concepts and techniques in e-governance, e-learning, e-banking etc.
Mr Maran said that besides software and services, India could also be relied upon for contract manufacturing in the hardware sector. However to move up the value chain in IT, the sector has to concentrate on research and development. We need to build several Silicon valleys, multiple Stanford universities, netpreneurs and many Indian Bill Gates, he said.