European companies are making savings of up to 50 per cent by outsourcing software development projects to India, spurring a huge boom in the subcontinent's IT business.
Indian software exports are projected to climb by 30 per cent next year, from the estimated $1.8-$2 billion at the close of the present financial year.
Much of the growth is coming from Europe, and companies like the Karnataka Group, an Anglo-Indian software provider, is doing good business connecting European companies with the large pool of Indian programming talent. ?By tapping into the skills base in India we can carry out a project for about half the amount it would cost to do in Europe,? said Simon Dennison-Smith, UK managing director of Karnataka.
Sanjiv Kataria, vice president at NIIT, India?s leading computer education company, believes outsourced work associated with the Year 2000 problem will account for $500-$600 million of India?s total projected exports of $3 billion for the next financial year. Indian firms are also anticipating an influx of work related to European Monetary Union.
Dennison-Smith believes that a high interest in engineering among young Indians has created the wealth of technical skills the country has to offer, compared to its European counterparts.
?The two most popular courses in Indian universities are medicine and engineering," he said. "This really shows itself when you look at the quality of their IT professionals. A lot of the current European workforce are ex-hackers who haven?t had very much university training."
He added: ?The distribution of skills at the present time means that India has a real monopoly on technical projects whereas European software companies are better at developing business related software.?
Western companies are also setting up in India in droves to exploit the large pool of programming talent. Microsoft, Computer Associates and Holland?s Baan are set to set up development centres this year, joining the likes of Oracle, Texas Instruments and Motorola.
But India?s internal IT industry is still slow in developing, according to Dennison-Smith. ?They are basically playing catch-up at the moment.?
Sanjay Kumar, president of Computer Associates, which recently announced plans to invest $100 million in India, put the country?s computer base at only 1.8 million, in a population of 930 million people, and believes there must be greater investment in computers. ?India has to support more entrepreneurs and move up the value chain,? he commented.
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