Many are looking to the mainland as an alternative to India's US$12.5 billion (HK$97.5 billion) software industry, lured by lower costs, good infrastructure and proximity to Western firms pouring record investments into the country.

US-based Cognizant, whose revenue grew 59 percent to US$587 million last year, expects to have 50 to 100 people working in the center by year-end and 350 to 400 two years later, chief technology officer Srikanth Sundararajan said.

It employs about 10,000 software engineers in India.

``The ramp-up will be linear for the first two to three years,'' he said Thursday on the sidelines of a software conference in Shanghai.

``After that, we would consider strategic partnering ... We are committed to being here.''

Cognizant is part of a trend in the mainland producing rapidly expanding software exports, which grew at an average annual rate of 67 percent between 1999 and last year to hit an estimated US$3.5 billion last year.

Indian software companies active in China include industry leader Tata Consultancy Services and Wipro.

Still, some outsourcing firms are coming up against a shortage of English speakers with the experience needed to work with overseas clients that can demand hundreds of engineers for a single project.

There is tough competition for the labor pool. Tata Consultancy plans to expand its workforce in the mainland to 1,000 over the next year from 200 at the end of last year. Last week, outsourcing specialist BearingPoint said it could have as many as 10,000 software engineers in the mainland - up from about 500 at present - within the next few years.

And venture capital-backed Freeborders plans to double its staff to about 700 by the end of this year from 325.

Sources said this week home-grown player Kingsoft - which bills itself as the mainland's largest software developer - is planning a US$100 million to US$300 million US initial public offering to help bankroll growth.

REUTERS