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Thursday, 18 April, 2002, 13:56 GMT 14:56 UK
Indian software faces Chinese competition
Software programmers at work at an Indian software company in Bangalore, India
India benefits from its large pool of skilled workers
The fast growth in China's IT sector should not be seen as a threat by the Indian computer sector, an industry body has said.

Indian firms should instead focus on the opportunities created, urged India's National Association of Software and Service Companies (Nasscom).

China is focusing on its domestic IT market.

As such, it does not pose a threat to India's software exports, Nasscom said.

It highlights the need for India to work to maintain its competitive advantage in the face of China's expansion, the industry body said in a report.

World trade

Indian companies who enter into joint ventures with Chinese firms could benefit from China's entry into the World Trade Organisation (WTO), Nasscom said.

Nasscom's five point strategy for the future
Improve productivity
Form alliances
Upgrade skills

There are 16.3 million personal computers in China compared to just 6.4 million in India, and China has almost three times as many internet users as India.

In China there are 165 million mobile phone subscribers, India has only six million.

China is also far more advanced in the number of fixed line telephone connections and high telecoms bandwidth capacity.

However, the report also found average wage costs in China were 15-20% higher than in India, and Chinese companies lacked domain expertise and project management skills.

Planning for the future

Nasscom will be meeting with the Indian government to discuss its findings and draw up a plan to ensure that the country maintains its competitive advantage in the industry.

It identified five key focus areas.

Companies must increase productivity, innovate and form alliances to bid for more complex projects, and maximise capacity.

They must collaborate with academic institutions to develop products and technologies, and must ensure that the high skill level of Indian workers is strengthened in areas such as project management, languages and software engineering.

Nasscom was formed in 1988 to ensure India's software-driven IT industry remains globally competitive.

Its 870 member companies make up more than 95% of India's software industry revenue.

Kirin Karnick, Nasscom president
"I think we have a lead for at least four years"
See also:

17 Jan 02 | Business
China welcomes Indian IT venture
15 Jan 02 | Business
China and India build business links
04 Dec 01 | Business
India pushes for IT summit
27 Nov 01 | Business
India to woo IT makers
23 Nov 01 | Business
India eyes European tech market
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