TCS to enter into JV with China govt

Tata Consultancy Services has been selected to partner the National Development and Reforms Commission, an arm of the Chinese government, in a crucial joint venture.

The JV aims to cater to the software as well as IT enabled service needs, including business process outsourcing, of China, the APAC region and the international market. In the process, TCS is believed to have pipped Wipro, Infosys and Satyam to the post.

The Indian software bigwigs were extremely keen on this partnership not only because of the scale of the assignment but also because it gives the chosen one a firm foothold in the Chinese government machinery.

As such, TCS may be in a favourable position when big contracts come up in the run-up to the Beijing Olympics of 2008.

A top TCS executive based in the Asia-Pacific region told Business Standard that an announcement in this respect will be made tomorrow.

"It is pretty big. The Indian partner will also work at developing the IT service infrastructure in China and guide the Chinese government on how to go about it. We were also in the fray," said a source at a software major that lost the race.

The Chinese government decided to rope in an Indian partner to take advantage of processes like SEI-CMM Level 5 as well as the ability to undertake large-scale projects.

The deal is been seen as an extension of Chinese premiere Wen Jiabao visit to Bangalore in April earlier this year, during which he called for closer collaboration between the two countries.

During the visit, Jiabao had commented that India's software prowess and China's hardware expertise, if brought together, could help both countries scale greater heights.

About 18 Indian companies including TCS, Infosys, Wipro and others have already set up shop in China, employing about 2000 people. Nasscom chairman S Ramadorai has said he expects the number to double to 4,000 by the end of this year.

Nasscom, in fact, has decided to send a delegation of Indian companies to China in September-October this year to look for opportunities.

China's software market was worth 220 billion yuan ($26.5 billion) last year, accounting for 3 per cent of the global market. Its export volume last year, estimated at $2.8 billion, was only about a tenth of India's.