China back on Indian IT firms’ radar

TCS, Infosys, Wipro and Satyam cumulatively invested about $100 million till March last year, and another $ 50 million after that

 

Indian IT companies once again regard China as a promising launch pad for business not only in that country but also in Japan, Thailand and South Korea. Among them, Wipro and TCS are looking at deepening their presence in China. Wipro may also shift some of its projects from India to China.

 

Analysts tracking big IT companies say TCS, Infosys, Wipro and Satyam cumulatively invested about $100 million till March last year and lost $30 million. Since then, another $50 million has been invested, though, possibly, not any of it by Satyam.

 

The new investment is in the hope that things would turn for the better, as not only offshore customers but Chinese industry, too, will need IT services even more to cut costs and stay competitive.

 

Already, Infosys, which all along lost in its China operations, appears to have turned the corner, having posted a modest $1.59 million profit in the last quarter of 2008-09.

 

The Indian firms realise they have to be in China in the long term to be able to penetrate its IT service market which, they believe, is opening up. The strategy includes more IT centres, joint ventures, and developing and nurturing local talent, much like they did in their home country.

 

Source: Financial Chronicle