India are planning to build 43 New IT cities in 10 yrs

The IT industry's footprint looks set to expand beyond its existing homes.

Faced with a challenge from upstarts threatening to erode India's low-cost appeal, the government is planning to build 43 new information technology cities across the country to retain its top dog status in the business and to be in a position to tap the huge surge in demand for IT-enabled services over the next 10 years.

The move comes at a time when the rising infrastructure and employee costs in big cities is threatening to blunt India's crucial cost advantage.

While India has held on to its pre-eminent position, its IT and BPO companies are losing their global cost advantage with the emergence of countries like Vietnam and the Philippines, which offer similar services at cheaper rates and are threatening India's status as the world's back office.