The joint venture will handle IT assignments for U.S. and European businesses

InformationWeek Staff, Contributor

March 4, 2003

2 Min Read

BANGALORE, India (AP) -- An Indian software firm and Chinese company have set up a joint venture that will do technology work for U.S. and European businesses at lower costs than what they would spend at home, an executive said Thursday.

Several American companies have shed jobs in the United States and moved software development and routine office functions to India to take advantage of lower salaries and technology talent. A programmer typically earns $12,000 a year in India, while a similar professional would earn $60,000 in the United States.

Now, the India-China joint venture could mean even more savings.

"In some cases, the cost can be as low as half of the costs in India. My clients are certainly interested in giving us business to be implemented from China," said Pawan Kumar, chairman of VMoksha Technologies, a software company based in southern Bangalore city.

The privately owned VMoksha and CDC Outsourcing, a unit of Chinadotcom Corp., a Shanghai-based technology company listed on the Nasdaq stock exchange, have set up a joint venture, with the Chinese company holding a 51 percent equity stake and the Indian firm holding the rest.

Kumar declined to say how much his company was investing in the joint venture.

Any orders won by the joint venture would be executed by either company.

Kumar said his company's largest customer, S1 Corp., an Atlanta, Georgia-based financial software company, wants to get part of its work now done in Bangalore shifted to CDC.

Another customer, Pleasanton, California-based PeopleSoft, was looking at subcontracting the payroll accounting work for its Chinese employees to the India-China joint venture, Kumar said.

Former Chinese premier Zhu Rongji said during his visit to India last year that India and China should collaborate to become a "global technology superpower."

India's Infosys Technologies, whose customers include Boeing, Nortel, Visa, Cisco and British Telecom, plans to open a development center in China, but the Chinese approvals have been delayed.

VMoksha employs 500 people and CDC Outsourcing 150 people.

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