China’s ITeS market estimated to touch $7 billion by 2014.

Top Indian IT companies plan to hire some 15,000 people for their Chinese operations.

China has become a tough battleground for Indian IT firms, as they face increasing competition from the local industry. But this has not stopped Indian majors from expanding their operations and increasing their headcount there.

These companies are now sharpening focus on markets not currently preferred by Chinese companies.

The challenges and opportunities for Indian IT investors in China were discussed at length at a recent CII-sponsored seminar on ‘Doing Business with China’ here.

According to a paper presented by FDI consultant Dezan Shira, the top three Indian IT firms — Tata Consulting Service, Infosys and Wipro — alone plan to take on board some 13,000 employees in China in the next two-three years.

TCS expects to increase its China headcount from 1,200 to 5,000 by 2014. Having serviced four major Chinese banks, including Bank of China, the firm now plans to develop ‘intelligent cities’ there.

Infosys, which employs 3,200 people in China including 1,000 at its Hangzhou BPO centre, is setting up its own $150- million campus in Shanghai to accommodate about 8,000 employees.

The company is sharpening focus on accessing the broader East Asian market. Its recently established Dalian office, for instance, enables it to support Japanese and Korean processes in China. Wipro has about 1,000 employees in Shanghai and Chengdu. It is looking to increase its workforce to 3,000-4,000 in the next two-three years.

Other IT firms, including HCL Technologies, SAP India and Tech Mahindra, have similar China plans.

China’s software industry is expected to grow at a CAGR of 22 per cent in 2012. It is estimated that China’s ITES market will reach $7 billion by 2014 from the present $4 billion. According to the National Bureau of Statistics, the Chinese government spent over $36 billion on IT infrastructure in 2011.

(This article was published on August 3, 2012)
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