Still in demand: IT companies eye business in Gujarat

It has almost been a decade since Gujarat missed the information technology (IT) bus. However, leading real estate consultants feel it still has a chance despite the lost opportunity if the state government puts in place the right policies, shows political will and focuses on infrastructure development. According to many of them, IT and information technology enabled services (ITeS) companies have their hearts set on Ahmedabad and Vadodara.

Real estate consultants believe that the next phase of growth in Gujarat will come from IT. According to them, it is not real estate but the right kind of talent that attracts IT companies. “We are looking forward to a lot more inquiries from IT clients, and it is just a matter of a couple of quarters before we start to see them coming in,” said Anuj Puri, chairman & country head, Jones Lang LaSalle.

However, it would be too early to expect product development in Ahmedabad, as Bengaluru and Pune have the right kind of talent. Therefore, one can expect only back office operations to come up here. Apart from that, consultants also do not expect foreign IT companies to outsource their business to Ahmedabad.

“The companies based in USA will not choose to outsource their business directly to Ahmedabad. One can expect local companies like Indian telecom operators, which cater to the large Hindi-speaking belt in the country, to set up operations here,” said Puri.

“The dialect or accent is very much Indian, not neutral, so it is difficult to attract foreign companies here,” Puri stated, adding that Gujarat was under consideration for the first time, and that in itself was a good sign.

Speaking about how IT could boost growth in the state, Puri explained that IT companies will bring in a lot more migrants to the state, mostly from the younger generation, who are more consumption-oriented. This will usher in the mall culture and will provide a further fillip to the residential property market.

Sanjay Dutt, Executive Managing Director, South Asia, Cushman & Wakefield, also said that around 20% of the work force of IT companies in Bengaluru and Pune comes from Gujarat.

“Whenever a company looks to expand, they will go to tier-II cities, where talent is available and wages are lower,” said Dutt.
According to Dutt, had Gujarat cracked the code for IT, and brought Microsoft here, the story would have been much different.

Real estate consultants are of also of the opinion that certain policy decisions such as a liquor ban, the lack of options for entertainment, and most importantly the challenge of language will have to be overcome by the state if it wants to lure IT and ITeS companies.