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Japan’s New Norms May Not Hurt Indian IT

Indian IT service providers may not be impacted by the Japanese government’s recent decision to restrict foreign ownership in high-tech companies, according to industry body Nasscom.

Japan has restricted foreign ownership in its information and communication sector effective August 1, primarily to ensure a strong cyber security framework.

“Our companies do not have much revenue from Japan, but they have been acquiring some companies there. So, prima facie, it appears that the regulation may not have an adverse impact.

We hear that it may not be retrospective,” Gagan Sabharwal, senior director, Global Trade Development, Nasscom, told ET.

Once the rule comes into force, it may create an additional watchdog to reinforce strong regulations, Nasscom said.

Japan has traditionally been a tough market to crack for Indian firms. In recent years, IT providers such as TCS and Infosys have formed joint ventures with local entities to tap the market. Infosys said in December it would acquire 81% stake in Hitachi Procurement Services, a subsidiary of Hitachi.―India Finance News

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