AP Government to ink MoU with Israel to support IT cos; SMEs

HYDERABAD: Andhra Pradesh Government is set to enter into an agreement with Israel to boost the opportunities for start-ups, small and medium enterprises (SMEs) in the IT sector, a top state official said today.

Both Governments may sign an MOU in this regard during `Advantage AP 2011', a two-day corporate event to be held here from March 1, K Ratna Prabha, Principal Secretary-IT, said.

"This will be a unique agreement where the AP Government is putting about Rs 10 crore and Israel Government another Rs 10 crore as seed money. The MOU is exclusively to support start-ups and SMEs in IT and IT-enabled services. We are still working out modalities," Ratna Prabha told PTI.

As Israel is ranked No. 2 in terms of supporting SMEs to grow their business, the West Asian country will help Andhra Pradesh-based SMEs identify markets for products and also arrange for finances for product development, she said.

"The proposed agreement will be basically about helping SMEs find market for their products and services. The tie-up will also help in tying up for funds. This is more of a giving them psychological support."

Speaking about the Government initiatives, she said AP is the first state in the country to have mandated that big companies which bagged Government projects should outsource at least 10 per cent of the work to SMEs.