A top Chinese official said Tuesday China’s state-owned Enterprises (SOEs) were “not blocking” Indian Information Technology (IT) companies, which have so far struggled to obtain contracts from the state sector, and suggested that the success of other foreign companies in China was an example to India.

“We do not pose any impediments for Indian software companies in entering into cooperation with SOEs”, Yang Xueshan, Vice-Minister in the Ministry of Industry and Information Technology (MIIT), and one of China's senior most officials in charge of IT policy, told Business Line in an interview.

Yang was speaking on the sidelines of the third Strategic Economic Dialogue (SED) between India and China, which took place here on Tuesday.

Yang’s Ministry and India’s Ministry of Communications and Information Technology signed an MoU on “cooperation in the field of Information and Communication Technologies”, an agreement described by officials as showing Chinese willingness to move things forward in the IT sector.

“The MoU essentially is a formal recognition (from China) that we want to promote Indian IT',” said Deputy Chairman of the Planning Commission Montek Singh Ahluwalia, who headed the Indian delegation at the SED.

Ahluwalia said he did not think there was “a bar on Indian companies”. India has identified IT and pharmaceuticals as sectors to push for greater market access in China.

So far, only Tata Consultancy Services has had significant success in securing major contracts from both SOEs and local governments. TCS has contracts with the Bank of China and several other banks, and is also working with local governments on e-governance projects. Most other companies have, so far, largely worked for multinationals based in China.

One Indian official, speaking on the condition of anonymity, said Chinese bidding procedures were often cumbersome and opaque, and there were legitimate reasons to complain of a lack of access.

At the same time, the official said the success of TCS showed that companies also needed to get their strategy right for China, and invest more than they were at present in understanding the market.

Yang earlier headed the IT division of the Policy Planning department of the State Council, or cabinet. He said he was well aware of the “expertise” of Indian IT and of “mutual complementarity” between India’s software strength and Chinese manufacturing.

“There are no obstacles for Indian companies,” he said. “There are various (foreign) software companies that are engaging with SOEs today”.

Prakash Menon, head of NIIT China, which has had success in establishing a network of educational centres and is training more than 10,000 Chinese every year, said there was “a change in how China is responding” to Indian IT.

Menon was part of an IT working group that met here on Tuesday, one of five such groups that meet alongside the SED. The working group will meet again in July or August in New Delhi.

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