India was likely to lose some of the advantages that it had over China as the land of the dragon might emerge as a cheaper alternative to India, said global research firm International Data Corporation.
"Because of its unprecedented growth, India and other countries have perceived China as a threat. This is more relevant for India as the infotech market in the country is predominantly export-oriented and has thrived till date because of its costs and skilled manpower advantages," IDC said in a recent study.
However, IDC also feels that India still has an edge over China in terms of high quality and English-speaking manpower, extensive global experience and project management skills.
"These advantages will be too overwhelming for China to match and overcome at least in the short term," IDC said.
IDC also said China's entry into the World Trade Organisation in December 2001 had broadened and deepened China's participation in the globalisation process and had provided more confidence to foreign investors.
"This has led to a fear among many developing countries, including India, regarding loss in information technology investment share to China and increased competition in foreign markets," IDC said.
Pointing out that China has seen a spurt in foreign investment even in a worldwide recessionary economy, the research firm said, "This is supported by the fact that China enjoys similar advantages as India and much more in terms of lower labor costs, better infrastructure facility, heavy promotion of information technology due to huge domestic market."
IDC said the Chinese infotech market was expected to grow 18.2 per cent in 2002 over the previous year to reach $22 billion.
The Chinese market is expected to touch $55 billion by 2006 at a compounded annual growth rate of 24 per cent.
China has emerged as the largest information technology market in the Asia-Pacific region with its market share at 30.6 per cent followed by Australia at 18.5 per cent and Korea at 16.4 per cent.
"Even in terms of growth rates, China is expected to surpass India by reaching a growth rate of 18.2 per cent compared to India's 5.2 per cent in 2002," the survey said.
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