Global investment in offshore IT services will grow from $7 billion in 2003 to $17 billion by 2008 and India was among the select group of countries that are poised to gain from this spurt in outsourcing, a new research has predicted.

According to a study by analyst firm IDC, spending by American customers on offshore IT services will continue to concentrate heavily on applications, with most activity in the areas of custom application development, application management and systems integration.

As the phenomenon is expected to gain ground, the countries that are poised to gain will be India, the Philippines and China, joined by central and eastern Europe, ths study said.

"Customers' continued need to look to offshore as a resource from which to procure IT services as part of their overall sourcing requirements is not only growing as a share of the total IT services market, but is expanding from traditional IT services, such as application development and maintenance, to areas traditionally limited to being delivered locally," David Tapper, director of outsourcing, utility and offshore services research at IDC, said.

"These services range from application and infrastructure management to IT consulting," he added.

"Due to the persistent need for customers to reduce costs, coupled with the proven capabilities of offshore players, IDC [sees] considerable market opportunities for these players in the onshore markets, as well as local players looking to leverage offshore as part of their service delivery capabilities," Barry Mason, senior analyst for IDC's application outsourcing and offshore services research, said.