India's reputation as a rapidly growing technology hub has received a boost with several global IT companies announcing plans to invest billions of dollars in the country's high-tech sector. Software giant Microsoft is also promising to focus its research in India on developing low cost computers.
Microsoft Chairman Bill Gates unveiled plans during a visit to New Delhi this month to strengthen his company's presence in India by investing $1.7 billion during the next four years.
The company will also increase its workforce from four thousand to seven thousand.
The announcement came days after computer chip manufacturer Intel Corporation said it would invest more than one billion dollars in India in the next five years.
Both companies will spend a substantial part of the money on research and development.
In October, communications equipment maker Cisco Systems announced it would invest more than one billion dollars and triple its staff.
A host of technology companies have been lured to India in recent years by its pool of highly skilled but low-cost software professionals, creating tens of thousands of jobs.
The Microsoft chairman told Indian businessmen that the country does offer "fantastic manpower."
But Mr. Gates said more needs to be done to bridge the digital divide in India, where many people cannot afford computers.
"Ironically in the case of the shoemaker's children not having the best shoes, if we look at the use of IT in the country, there is still far more that can be done…there will need to be increased investment in IT," Mr. Gates said.
Microsoft is promising to contribute to that effort by focusing research in India on creating low-cost products that would be within the reach of millions of poor people.
"India is the place where a number of the breakthroughs that are necessary will take place…. It is with that mind we created our fourth research center ….we said the theme of that would be low cost computing," Mr. Gates said.
Among the possibilities Mr. Gates suggested were making a mobile phone work as a computer, or developing computers that respond to speech.
Business analysts say global IT companies are also lured to India to tap the potential of its increasingly affluent 300 million middle-income consumers.