April 30, 2007 / 2:57 AM / 13 years ago

India's "breadbasket" aims to be new IT hotspot

CHANDIGARH, India (Reuters) - Fed up with traffic snarls and scarred roads, a software engineer in India’s flagship IT hub of Bangalore took to the streets in protest last year — doodling on his laptop while trotting along on a bullock-cart.

A view of an IT park in Chandigarh on September 17, 2006. While Bangalore continues to host the bulk of India's IT business and is home to more than 1,500 top firms, poor roads and traffic woes are now pushing IT firms to look beyond Bangalore -- to newer cities like Chandigarh, hundreds of miles north. REUTERS/Ajay Verma

While Bangalore continues to host the bulk of India’s IT business and is home to more than 1,500 top firms, poor roads and traffic woes are now pushing IT firms to look beyond Bangalore — to newer cities like Chandigarh, hundreds of miles north.

Chandigarh is joint capital of the Punjab and Haryana states — better known as India’s “breadbaskets”. The city is now taking tentative steps to become a new corporate destination.

“The IT industry is excited about Chandigarh’s potential as an emerging IT destination,” said Kiran Karnik, president of the National Association of Software and Service Companies (NASSCOM), India’s top trade body for the IT industry. “Already, many IT companies have begun operations there or have plans of doing so, making it one of the new ‘hot spots’ for the IT industry,” he told Reuters by email.

Infosys, India’s second-largest software company, was among the first to move here and began full operations from its complex spread over 30 acres in the Rajiv Gandhi Chandigarh Technology Park (RGCTP).

The office currently employs about 1,500 people and plans for more than 5,000 staff to work in the glass-walled building.

At least 13 other companies operate from the 123 acres of the park, including Wipro Ltd., Bharti Airtel, Tech Mahindra, and eSys.

“When fully functional in the next few years, the park is expected to have 25,000 IT professionals,” said Chandigarh’s IT director Manjit Brar. “It will be the IT hub of north India.”

Current investment in the park, located on the outskirts of the city, is 7 billion rupees ($165 million) and in two years it is expected to touch 30 billion rupees ($711 million), Brar said.


The city hopes to benefit from a booming market that India dominates.

India’s software sector expects exports to rise 33 percent to $31.3 billion in the fiscal year which ended on March 31, according to NASSCOM. In comparison, the Philippines earned $3.6 billion from outsourcing revenues in 2006.

Over 2001/06, India’s share in global sourcing is estimated to have grown to 65 percent for IT services and 45 percent for back-office services like call centres.

While there is excitement about Chandigarh emerging as the new IT stop, there is concern it could go the Bangalore way if it is unable to sustain rapid growth which IT brings to a region.

“There is no doubt that a lot of people are trying hard to sell Chandigarh as the next Silicon Valley in India,” said Simran Aujla, an IT professional.

“But I am not too sure if a city planned for 500,000 people will be able to sustain the rapid growth. Unless infrastructure keeps pace with growth, Chandigarh may become another Bangalore.”

To begin with Chandigarh is a federally-administered territory with restricted geographical boundaries.

Millions of square feet of office space outside city limits are required for it to be a full-fledged IT destination — something dependent on permission from the federal government.

But despite obstacles, many lives have already been changed.

Before the IT park, local graduates had few options to get well-paid jobs near home. They would either go to IT centres like Gurgaon and Greater Noida on the outskirts of New Delhi, or travel hundreds of miles down south to Bangalore.

“I was very tense in my college days because being the only daughter, I knew my parents would never let me go to Bangalore,” said Amrita Singh, who works for a multinational company.

“I was afraid my degree in engineering would just go waste but today I have no dearth of job offers with so many big IT firms flocking to Chandigarh,” she added.

Real estate agents, too, are excited at rising property prices.

“The IT park has pushed up real estate prices like never before,” said Amarjit Singh. “A small piece of land quoted for around 2.5 million rupees ($59,270) a few years ago is today unavailable for 10 million Indian rupees ($237,100).”

($1=42.18 Indian Rupee)

Additional reporting by Sumeet Chatterjee in Bangalore and Geetinder Garewal in Chandigarh

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