India’s rapid growth in IT technologies and Internet access has prompted networking giant Cisco Systems Inc. to make an enormous strategic investment in India over the next three years. This week in India’s capital New Delhi, Cisco Chairman and CEO John Chambers outlined the company’s $1.1 billion investments plans during a meeting with India’s Prime Minister Manmohan Singh and Information Minister Dayanidhi Maran.

“Cisco believes that the Internet, and related technologies, will be a key enabler for India to achieve its goal of becoming a developed nation, said Chambers. As Indian companies strive to be globally competitive, they have realized the importance of investing in information technology and networking to adapt quickly to rapidly shifting market transitions." Chambers also added, "A year and a half ago, Cisco recognized this inflection point in the Indian market and made several strategic investments, which are paying off today. Cisco in India is truly a global success story."

The Indian networking market has grown rapidly in the last few years, fueled by liberalization, market reforms and telecommunications deregulation. To better service the needs of Indian customers, eighteen months ago Cisco India formed five vertical business groups: IT Services, Enterprises, Service Providers, Government and Defense, and SOHO/Consumer.

Cisco's three-year expansion plan in the country will direct investments in the following areas:

• $750 million will be allocated to R&D activities, including training, development and staffing over the next three years. Cisco's own R&D activities will be complemented by work done by Indian strategic partner companies.
• $150 million will be dedicated by Cisco Systems Capital - a division of Cisco Systems, Inc. - to provide leasing and other financial solutions to Cisco customers and partners.
• $100 million in venture capital will be earmarked by Cisco to invest in Indian start up companies.
• $100 million will be invested in customer support operations.

This plan includes an agreement with the Indian government to support its National E-Governance Plan, which will provide e-connectivity at the village, district and state levels in India. According to Cisco, just as the Internet revolution is important to cities, it can have (and is having already, in some places) the same effect in rural settings. If the E-Governance Plan is successful, it will be scalable and that it will create a model for use elsewhere - in India and around the world.

Cisco first established operations in India in 1995 and today employs more than 1400 people in the country in its Global R&D center in Bangalore with offices in other major cities in the country. Additionally, the company is also committed to expanding the Cisco Networking Academy program in the country. There are currently 141 networking academies across 22 States and Union Territories in India, and the program will be extended further within each State and Union Territory by 2006.

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