Considering the strategic importance of Chile in the Latin American Region and its lead role in the ICT segment, the Electronics and Computer Software Export Promotion Council (ESC), a facilitating body, has set up an office there and it has become fully operational.
The office will be a window for Indian ICT companies to enter the Chilean expanding ICT market either to cater to the growing Latin American market or to use it as a base for catering to the LATAM and North American ICT markets, taking advantage of its proximity and relative cost advantage.
The ESC’s office will connect Indian and Latin American ICT businesses. There are similarities between the ICT sectors of both. There is a large presence of MSMEs in both regions in the segment. Like in India, the governments in Latin American countries lay considerable importance to digitization.
In the context of Chile, its information and communication technology (ICT) market is on a growth trajectory, set to increase by 9.3 percent annually over the next five years. This surge is propelled by a heightened focus on digital technologies like cybersecurity, artificial intelligence, and robotics. Chilean companies are notably investing heavily in hardware and software services, further fuelling this sector’s expansion.
The ICT sector encompasses both information technology (IT) and telecommunications. Investments in IT are on the rise, and the overall demand for ICT services is projected to soar in the coming half-decade. Several factors contribute to this upswing, including the drive to explore and embrace digital technologies, the growing appetite for digitalization, continuous developments in IT infrastructure, widespread adoption of 5G networks, and increased investments in technology.
ESC office gateway to other countries in the region
Yes, indeed. The ESC office will extend its services to other significant Latin American markets, such as Brazil, Colombia, and Mexico. These markets have witnessed tech startups accounting for over 40 percent of mergers and acquisitions (M&A) activities. The envisioned roles of the ESC office encompass scouting the ICT markets in the region, identifying products with market potential, and compiling a list of prospective companies and professionals for potential collaborations and business ventures.
Why Chile for the first office?
Chile possesses unique attributes that make it an attractive destination for investment for Indian ICT entrepreneurs. Microsoft, for instance, has implemented a robust upskilling strategy benefiting up to 180,000 Chileans. An Advisory Board, consisting of local leaders, is actively working towards creating inclusive opportunities for success in the digital economy. Additionally, Huawei is offering AI cloud services from a new data center facility situated in Santiago. These initiatives open up fresh growth prospects for the Chilean ICT market.
According to the International Telecommunication Union (ITU), Chile’s internet penetration is set to experience steady growth until 2026. Recent data indicates an increase in internet penetration from 86.7 percent in the previous year. Projections indicate that Chile’s internet penetration will reach 88.8 percent by 2026. This upward trend in internet usage is poised to create new avenues for growth within the Chilean ICT market.
According to Sandeep Narula, Chairman, ESC, the ESC office will provide a number of services to Indian ICT companies, including Marketing Information, business match-making, government relations, and localization support. “ESC Chile will also be a hub for knowledge sharing and collaboration between Indian and Chilean ICT businesses and will be a major milestone for the Indian ICT industry. It will help Indian companies to tap into the growing ICT market in Latin America and expand their global footprint,” added Narula.
The Latin America region is an important market for the Indian IT Industry and offers huge opportunities for the Indian IT Industry, Gurmeet Singh, Executive Director, ESC told Financial Express Online.
“Latin American businesses are increasingly adopting digital technologies to improve their operations and efficiency and this is driving the demand for ICT products and services, such as cloud computing, data analytics, and cybersecurity. LATAM Governments are investing in the development of their ICT infrastructure, such as fiber optic networks and data centers, and thus creating new opportunities for the ICT companies in this region, added Singh.
Further, “the e-commerce market in the LATAM region is also growing rapidly, driven by the increasing use of the internet and smartphones and this is creating new opportunities for companies that provide e-commerce solutions. Similarly, upskilling the workforce to meet the demands of the digital economy is a trending and opportunity sector for training and development services companies,” Singh said.
Narula said that both India and Chile have a strong Software Development industry. Indian companies are known for their high-quality software and solutions at a very competitive cost, while Chilean companies are known for their innovative and creative solutions. Internet of Things (IoT) applications have also seen rapid growth in both countries and there is a lot of potential for collaboration between the two countries for joint research and development and development of IoT solutions for specific sectors. There is a lot of potential for collaboration between the two countries in this area and ESC Chile will help exchange of information, business, and growth opportunities for the ICT businesses in the two countries, hoped Narula.
ESC’s flagship event – Indiasoft: International IT Exhibition & Conferences has played an important role in increasing the engagements of global buyers with Indian ICT companies. The Indiasoft platform has created many success stories of ICT business between the two countries and the 23rd edition held recently attracted over 650 overseas buyers covering 80+ countries and resulted in Rs. 140 crores of business and signing of over 200 MoUs and 4600 inquiries, said Gurmeet Singh, ED, ESC India.