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Mohali Markers: STPI helps catapult IT exports to Rs 3,800 crore

The STPI has helped to catapult the IT exports from tricity to a handsome 3,800 crore by handholding new entrepreneurs and building the necessary infrastructure.

punjab Updated: Aug 19, 2017 15:40 IST
Vivek Gupta
Vivek Gupta
Hindustan Times, Mohali
Software Technology Parks of India,STPI Mohali,IT exports
SPTI building at Industrial Area in Mohali. (Anil Dayal/HT)

When the Software Technology Parks of India (STPI) set up an office in Mohali in 1998, the IT exports from the tricity stood at a mere 7 crore, today they have jumped to an astronomical 3,800 crore. Industry insiders attribute this big leap to the software technology park, which is one of the largest in the country.

Set up to develop and promote exports pertaining to Information Technology (IT) trade in Tier 2 cities, the STPI has been both a mentor and regulator for the local IT entrepreneurs, providing them a host of services such as commercial internet connections, data centre hosting and other policy support required to connect with their offshore clients.

Know the institution:
  • Software Technology Parks of India (STPI) was established and registered as an autonomous society under the Department of Information Technology in June, 1991, to develop and regulate IT exports in India.
  • Its Mohali centre, which came up in 1998, was among the initial offices in tier-2 cities after the central government decided to boost IT exports from these cities.
  • Its prime job since the days of its inception has been to help local IT companies get tax concession under STP schemes and certify their exports.
  • With its new incubation facility in Phase 8B, Mohali, ready for use, it is now increasingly donning the role of a facilitator than a regulator. It will soon hold regular workshops and seminars in partnership with industry and experts to upgrade the skills of professionals working here besides helping the industry with market analysis and new areas of business.
  • The companies registered with STPI no longer get income tax exemption but they can avail exemption of indirect taxes like central excise duty or customs on any purchase meant for their unit’s expansion. Under the GST regime, they will also get refund.

Nearly 150 IT/ITES, mostly registered in Chandigarh and Mohali, are now developing products and offering services to their foreign clients through a vibrant workforce of over 35,000 IT graduates. The future, local STPI officials say, is very bright given that Mohali is building the right infrastructure.

Changing roles

Going down the memory lane, Ajay Prasad Shrivastava, the additional director heading the office here, said that barring a few companies, majority of the people had no idea about IT exports and the business opportunity they presented when they set up their office here. Internet connectivity was also an issue at that time. “But we managed to overcome all such bottlenecks over the years thanks to the right approach of the local government authorities and business community,” he said.

STPI is region’s first commercial internet service provider that helped companies connect with their clients thousands of miles away. After the advent of other private internet service providers in the early 2000, it changed its role to that of a facilitator, helping the local industry in decoding central schemes and passing on tax benefits for their expansion.

RP Singh, CEO of home-grown company Seaasia, says though STPI is a certifying authority of their exports, it never played the role of a regulatory body unlike government departments, and that is the reason, business grew by leaps and bounds and has the potential to grow even further.

Shrivastava says the arrival of Quark Software in Mohali, inauguration of the Rajiv Gandhi IT Park and the periodic e-revolution seminars by STPI were some of the landmarks developments that gave a fillip to export business here.

Embarking on new journey

Well ensconced in its new headquarters at Phase 8B, STPI is gearing up for yet another change of role.

Shrivastava told HT that they are in touch with several industrial organisations and experts along with IT trade representatives to regularly hold seminars and workshops for the industry. He said IT trade in the tricity has reached a stage where it needs to focus on skill development of professionals working here besides exploring new trade opportunities abroad.

“Although all companies in this trade are sensitive to these issues, sometimes individual efforts don’t benefit the industry at large. Our role is to create a synergy between new market trends and industry so that everyone learns from each other’s experience,” explained Shrivastava. “Earlier, we had constraints of space but now we have a new state-of-the-art building that has auditoriums and enough space to hold such programmes and workshops regularly,” he added.

STPI’s swish new building is a stark contrast to any humdrum government facility. A hi-tech power efficient building, it has also created nearly 55,893 square feet of office space from third to sixth floor for start-ups. Many companies are already queuing up for the office space.

The second floor is dedicated to budding entrepreneurs who can get affordable office space under its plug-and-play scheme subject to approval from STPI’s selection committee.

The internet connectivity and storage capacity of data are two major concerns of IT trade. The STPI has addressed both these issues efficiently in this building. Its first floor is dedicated to 160-rack data centre along with high speed internet connectivity to ensure ease of business for entrepreneurs.

“We are a friendly office and provide all possible assistance to anyone who approaches us for setting up a new export unit. We even help them in filling up forms,” claimed Shrivastava.

Future bright

If STPI’s projection is to be believed, IT exports from the tricity can double in the next five to seven years and Mohali will earn a major share of the dividend due to the changing business dynamics.

One major reason for this buoyancy is the upcoming IT city (Sector 83 and 101) in Mohali, which is located in the vicinity of Chandigarh International Airport. Of the 46 companies allotted space here, many firms have already begun construction. Quarkcity, the first special economic zone for IT industry in Punjab, is going to add another building to its huge campus in Phase 8B to make office space for nearly 30 IT companies. STPI’s own office can accommodate nearly a dozen IT companies.

Lauding the STPI for promoting IT in the region, Rakesh Kumar Verma, secretary, industries and commerce, Punjab government, said the software park officials not only understand the industry well, but also have the bandwidth to deal with all sorts of issues.

“The STPI will also play a crucial in future as our upcoming industry policy puts a major thrust on developing IT and electronic trade, with Mohali as the focal point,” said Verma, adding that the state government is very serious about IT and willing to help its stakeholders in any possible manner.

STPI officials say infrastructure logjam used to be a major problem in the tricity till a few years ago. “This is not the case now. The international airport will prove to be a major game changer for IT industry here once it is connected directly to Europe and US, making it more convenient for foreign clients to land here,” said Shrivastava.

Certification issue

After the end of income tax exemptions in 2011, several units stopped certifying their IT exports with STPI. Ajay Prasad Shrivastava, additional director heading STPI in Mohali, says such firms are flouting the rules. “RBI’s 2013 guidelines clearly state that banks can’t allow remittance of foreign currency to IT export units if their exports (against which the foreign exchange is received) are not certified by the STPI office in their area,” declared Shrivastava. But sources in the industry 5% to 10% of the existing units are flouting these norms.

First Published: Aug 19, 2017 15:39 IST