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A joint venture has been formed with partners from China, India, and the US. In December, 2006, Tata consulting Services (TCS), India’s largest information technology outsourcing company, joined forces with three Chinese state-owned companies and Microsoft to form a new soft-ware development center based in Beijing, China.The development has been hailed as one of the most striking steps forward in bilateral IT relations between India and China, which for many years have been marred by mutual suspicions. Political leaders, especially in India, have traditionally been skeptical about the export of technology skills from India to china. Why? India had concerns about assisting an economic rival.One sign of the complexities in establishing such a partnership in china is the time that it has taken to set up TCS China: The parties had signed the initial agreement to go ahead with the project 17 months earlier in June 2005. Under the agreement, TCS will hold 65% of the venture while three Chinese partners will hold 25%. Microsoft will hold remaining 10%. The three Chinese partners are organized under the National Development and Reform Commission, the powerful central government planning agency.The joint venture will leverage the complementary strengths of the investing parties in technology, soft-ware development management, and talent training. Of particular value will be TCS’s best processes and practices as well as its experience in handling larg and industrial scale projects. It will also benefit from the resources of the Chinese partners, which run the national soft-ware development parks.Microsoft should also benefit. According to Jonathan Spira, chief analyst of Basex, an IT research firm: “Microsoft is a global company so it makes sense for them to invest and participate in global partnerships, especially in markets as large as China’s. China is a region where Microsoft does not have anything close to resembling a foothold”.
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