Interestingly while there are deep tax concessions to Indian IT services companies serving international clients, for the product companies selling software products (or providing services) to Indian customers, there are no such benefits. This goes against both the stated objectives of the government and industry associations to build a world class IT industry in India. Which in turn requires a faster growth in use of IT in India and a move up towards offering IT products.
Product companies need local markets to be able to build deep understanding of their customer’s needs and perfect their offerings. A tax concession to these companies should be seen as an investment into the future growth of the industry.