Dion Wiggins, research director with Gartner's Aisa-Pacific operations, said the exports of software and application development services in China will grow from last year's US$850 million to US$27 billion in 2006, with an average annual growth rate of 620 per cent.

During the same time, Indian software and service sector exports will also jump from US$6.2 billion to US$27.5 billion.

The explosive growth of China's software and IT service exports will be inseparable from the Indian software businesses, Wiggins said.

He predicted that Indian-related companies in China will contribute to 40 per cent of the total of China's exports in the software and IT service industry, or US$108 billion in 2006.

Wiggins said the entry of Indian software vendors will bring their technology and management expertise to China, helping upgrade the level of China's software industry.

Although China has more than 6,000 software companies, double that of India, they only exported US$850 million in 2001, compared with US$6.2 billion of their Indian counterparts.

Wiggins pointed out that due to their lack of project management, low-technology level and small employee group, Chinese software firms have difficulties in winning big software projects from foreign organizations.

More and more Indian companies have realized the importance of the Chinese market and have decided to settle down here.

Girija Pande, president of Asia Pacific operations of India-based Tata Consultancy Services (TCS), said his company will use its Hangzhou-based research centre for global operations.

"A lot of Japanese outsourcing orders are from big companies and we hope to win some of them with our Chinese base, which is close to Japan both geographically and culturally," Pande said.

TCS, Asia's biggest software and service provider and the first Indian software firm to set up a Chinese subsidiary, will expand from 50 engineers in Hangzhou to 250 by next year.

(China Daily September 23, 2002)