Asia's biggest software developer has opened its first offshore software facility in Europe, in Budapest.

The new centre is part of Indian firm Tata Consultancy Services' increased focus on Europe in a bid to beat the economic slowdown in the United States.

The Budapest centre will do work for General Electric and employ 100 people, 80% of them recruited locally, said Atul Takle, who is Tata Consultancy Services' vice-president of corporate communications.

Bombay-based TCS pioneered offshore software development centres, which can manage clients' software from thousands of miles away.

Fast track

"If this experiment works out we'd be opening up more centres in Hungary", Mr Takle told BBC News Online.

Previous overseas expansion concentrated on the US market, where TCS has six such centres in addition to 17 in India.

He expects the new centre to recruit 80 to 100 new staff a year "at the very least" for several years.

"We have the models in place to scale it up to 300 or 400 people", he said.

Big name clients

At present work for its blue chip European client list is carried out from India but Hungary "could become a base for a lot of European clients", Mr Takle said.

TCS' European clients include telecoms firms Ericsson and Nokia, insurer AXA SunLife, Standard Chartered Bank and Deutsche Bank. Deutsche Bank

TCS choose Hungary because it offered better infrastructure and more computer literate workers who speak English than Romania or the Czech Republic, he said.

Furthermore, Hungary is in line to join the European Union by 2003.

Revenue shift

In a recent press interview TCS chief executive Mr S Ramadorai said the group will increase its focus on Europe and stressed the importance of hiring locally.

In 2000, US clients accounted for 62% of TCS's total revenue, with 27% coming from Europe and the rest from India and Asia-Pacific.

TCS, which is part of the gigantic Tata conglomerate, had revenue of $490m in 2000 and aims for $700m in 2001.

Chip production will remain in Malaysia and Thailand, Mr Ramadorai said.

According to Samir Arora, equities head of the Singapore-based mutual fund Alliance, top Indian software companies have a good chance of dodging the US slowdown.

He said they will can continue to grow at 30% or more on an annualised basis both because of the quality of their work and the cost advantage they have over their counterparts in the west.

TCS will open a display centre in Amsterdam within the next few months.