China and India's software industries are forging closer ties, as the world's two most populous countries are becoming the most favored offshore software outsourcing destinations.

"We believe cooperation in software industry between China and India is highly complementary and it is a win-win cooperation," said Xu Qin, deputy director of high-tech industry development at the National Development and Reform Commission, an active force in promoting international software cooperation.

Sunil Mehta, vice-president of the National Association of Software and Services Companies (NASSCOM) of India, also said at the first China-India Software Industry Summit Monday in Beijing that Chinese and Indian software companies compete in some parts of the world, but more importantly they need collaboration, as the global software outsourcing only accounts for 4 percent of total information technology (IT) spending, but the percentage will grow to 30 percent in the years to come.

According to US research house Gartner, global spending on IT service offshore outsourcing will reach US$50 billion in 2007 and the spending on business process outsourcing will amount to US$24 billion.

Gartner Vice-President Jamie Popkin predicted China and India will lead the global market in terms of offshore opportunities.

He used the phrase "India China Together" to make up an acronym ICT, which is often interpreted as information and communications technology, to highlight the importance of Sino-Indian software cooperation to the global ICT industry.

India is the world's biggest software offshore outsourcing destination, which has been regarded as one example of how to develop China's software industry and software outsourcing.

Indian companies' expertise in software project management and marketing are also valuable resources for their Chinese counterparts.

Qu Lingnian, deputy director of Beijing Software Productivity Centre, an organizer of the summit, said it will be held together with NASSCOM annually, with the meeting's locations rotating between China and India.

The national software export base in Beijing also opened a China-India software cooperation office to serve businesses in two countries.

Software companies are also aware of the opportunities and are starting to work together.

Chinasoft Resource Corp, one of the biggest software outsourcing firms in China, will send a delegate to India on Sunday to visit the headquarters of 14 Indian counterparts.

"We are open to all forms of cooperation talks to Indian partners," said Judy Yan, president of the firm.

She said her company would like to work with Indian counterparts on specific projects, form a joint venture, or acquire some Indian businesses to increase the capability of Chinasoft Resource in software outsourcing.

Lan Hongbing, president and CEO of Shenzhen-based Broaden Gate Systems Inc, which formed a 49-51 joint venture with the Indian counterpart ZenSar, said the joint venture has about 70 software developers.

The number will expand to 800 in three years through training by ZenSar.

Lan's company also worked with the Shenzhen municipal government to send 2,000 engineers to get them trained in India in five years and the first team will leave for India in April.

(China Daily February 28, 2005)