Vajpayee proposes Indo-China IT tie-up

SHANGHAI: India's prime minister began a visit to China's economic powerhouse by saying the two countries could combine their complementary strengths in information technology instead of competing.

Atal Behari Vajpayee, making a landmark trip to China, told a business meeting in Shanghai the Beijing Olympic Games in 2008 offered a chance for Indian and Chinese tech firms to work together -- despite linguistic and cultural barriers. Vajpayee said the two governments could help set the ground rules for a partnership that might simplify a now roundabout contract execution process.

Companies from developed countries that won software contracts for major events such as the Olympics in the past would in turn subcontract them to Indian firms, he said.

'Indian and Chinese firms could instead join up to provide state-of-the-art solutions at cost-effective prices, thereby also cutting out the middlemen,' Vajpayee told a conference.

'It is self-evident that our respective core competence in hardware and software provides a natural ground for an effective alliance in the IT industry,' he said.

His comments echoed those of former Premier Zhu Rongji during a visit to India in 2002 when China's economics tsar applied his stamp of approval to a request by software giant Infosys Technologies to set up a development center in Shanghai.

More than a year later, that plan remains wrapped in red tape as Indian software firms battle language, culture and regulators to gain a foothold in China.

'Our presence is very limited at the moment,' conceded Kiran Karnik, president of India's National Association of Software and Service Companies.

Still, ties between India and China, the world's two most populous nations, have warmed and they pledged this week to move forward with negotiations to settle a lingering border dispute and accelerate trade.

Vajpayee noted China was one of the world's leaders in the manufacture of computer hardware, while India's software industry had become a well-known success story.

Nonetheless, Karnik saw little direct threat for Indian concerns from Chinese competitors.

'I look at the rear-view mirror and I don't see anything, but it does not mean I am being complacent,' he said.

© Reuters