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India faces no immediate threat from China's software industry

China's emerging software industry does not pose an immediate threat to Indian companies but their exports worth billions of dollars might pose major competition in the future, a senior NASSCOM (National Association of Software and Service Companies) official said in Beijing on Tuesday.

"There is no threat from China in the foreseeable future. The Chinese software industry has a lot to catch up," NASSCOM vice president Sunil Mehta said.

NASSCOM, currently conducting its first-ever study of the Chinese information technology market, however, recognised the future competition that could emerge from the Communist nation, which was already way ahead of India in the capital-intensive hardware sector, he said.

Quoting the preliminary findings of the NASSCOM-McKinsey study 2002 on the software sector, he said India would see competition from emerging locations, particularly China in the next few years.

The study stressed that the immediate threat from China would be in the areas of research and development services and the Japanese market.

Mehta, who is visiting China's major software parks in Xian, Beijing, Dalian, Shanghai and Shenzhen and meeting Chinese officials, noted that while India exported software worth $8 billion, the corresponding figure for China was only $600 million.

He expressed confidence that China would not be able to develop its software industry overnight by pumping in money as it had done in the hardware sector.

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