Indian suppliers strengthening UK presence

But outsourcers must learn new skills to compete with established Western firms

India has rising domestic labour costs

India’s five largest IT services suppliers will double their market share in the UK over the next four years if they follow their current growth trajectory, says a study.

Indian suppliers TCS, Infosys, Wipro, HCL and Satyam are expected to grow their market share from under three per cent to more than seven per cent by 2011, according to Pierre Audoin Consultants (PAC).

The vendors are winning contracts in the UK based on the quality of their service rather than a cheaper price, but still need to improve in certain areas, said PAC senior consultant Nick Mayes.

"If they are to become major players in areas such as infrastructure outsourcing, they will need to prove their ability to successfully handle the transfer of staff from the client, which is an area where the likes of IBM and EDS carry far greater experience," he said.

In the last 18 months, UK companies including Carphone Warehouse, DSG and
Skandia have all committed to £100m contracts with Indian service providers.

The report found that Indian outsourcers will also have to combat the steady erosion of their price advantage by rising domestic labour costs and the strengthening rupee.