IBM sees growth in India

BANGALORE  - IBM, the world's largest computer services company, sees better growth in India as retail and small- and medium-sized firms spend more on technology, but a skills shortage was a challenge, an official said on Thursday.

IBM said its business in India grew 37 percent in 2006, making it the company's fastest-growing country operation, as telecoms, banks and government departments ramped up spending on computer hardware and services.

"India's basic economy has played a big role for us, and we are seeing growth coming from across industries," Shanker Annaswamy, regional general manager for IBM India and South Asia told a news conference.

"We see market growing so we are also investing in new areas like retail and healthcare. Hopefully, we will see growth. If you ask me am I positive, (I am) very positive."

IBM has won deals in India including from top mobile services firm Bharti Airtel Ltd. last August, and has made India a global delivery hub for software needs and client services.

It and other multinationals are also competing with India's export-focused software services companies for outsourcing deals from Indian banks, businesses and government departments.

Domestic spending on software and back-office services is expected to rise to between $7 billion and $7.3 billion in the year to March, from $6 billion in the previous year, according to India's National Association of Software and Service Companies.

But the rush for staff has led to rising wages and a skills shortage.

"It's (skill shortage) a challenge and we have got to address that ... currently all of us are recruiting," Annaswamy said.

"We know how to recruit quality personnel which are available in India, but we also know how to train them, how to give them career options and how to make them feel proud of being an IBM-er."

IBM employs 53,000 staff in India -- up from 3,000 in 2002 -- accounting for 16 percent of its global workforce and making it the company's second-largest operation after the United States.

Consulting firm Accenture Ltd. said on Monday it planned to raise staff numbers in India by 30 percent to 35,000 by August, overtaking the United States as its biggest employment base.