China cannot outdo India on outsourcing: Nasscom

Wednesday, 22 August 2007, 07:00 Hrs
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New Delhi: India will remain the most preferred destination for the global outsourcing business ahead of China even though the Asian giant is making fast strides in the area, says a major Indian lobby for the services sector.

China's educated workforce is growing rapidly and its government is supporting the growth of the outsourcing sector by providing incentives and fiscal support, says the National Association of Software and Service Companies (Nasscom).

But it is unlikely to catch India's lead in global outsourcing operations for the next 3-5 years as currently the IT software and services sector accounts for a just 0.5 percent of the country's gross domestic product, it said.

"India continues to remain the most favoured destination by far for information technology (IT) and IT-enabled outsourcing. But we need to ensure that we maintain this position in the years to come," said Nasscom president Kiran Karnik.

"This will require a favourable policy and tax environment, a huge thrust in education and human resources and vastly better infrastructure," Karnik told a press conference here while releasing the report on China's IT industry.

Beijing, in its aggressive effort to boost the industry, has initiated as much as 10 million programmes with which it is aiming to promote 11 cities as key bases for undertaking offshore services.

The Chinese government, under its ministry of commerce, has also created a specific fund for providing specialised training to some 400,000 university students over the next five years, the report said.

"Each month we host delegations from China which seek to learn from India. India too must learn from China's experiences," Karnik said.

"China's systematic and planned approach to rapidly developing sectors and its strong focus on education and infrastructure offer key learnings that may be usefully adapted to the Indian context."

The Chinese software and services revenues have grown from $2.4 billion in 2000 to $12.3 billion in 2006, an increase of 31 percent. The industry is expected to grow to $28 billion within the next three years.
Source: IANS
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