The time has come for Asian countries to get together

IT minister

India is a major player in the international software industry and could well benefit from such a regional alliance.

Mr Mahajan also said the Indian government is considering a major step to open the telecoms market to foreign competition by abolishing the 49% limit on foreign ownership of telecoms firms.

Asian alliance

His proposal for a regional summit comes at a time when many smaller south-east Asian nations are suffering economic pain because of their over-reliance on the US as a market for their hi-tech exports.

India's IT industry

Export revenue 2001/2, $7.7bln, up 30% Domestic spending 2001/2 $1.6bn, up 25%

Taiwan, Singapore, Thailand and Malaysia have all been hurt by the collapse of the US market for IT goods.

Mr Mahajan said "the idea is we should have some common policy or mechanism in IT and telecoms so Asia will be benefited".

"The time has come for Asian countries to get together."

India's software exports have continued to grow, though the pace has slackened. The sector boasts international names such as Wipro and Nasdaq-listed Infosys Technologies.

Surging growth

However, domestic IT spending is expanding at 25% a year as Indian firms turn to networked office systems and upgrade their telecommunications, according to Gartner Dataquest.

In a recent survey, it found information technology spending will hit $5.8bn by mid-decade, from $1.3bn in 2000.

Phone famine

Indian firms' big-player status in the software industry contrasts sharply with the country's underdeveloped telephone system.

Telephone density is one of the lowest in the world, at 2.6 lines per 100 people, well below the global average of 14.5 lines, and more than 250,000 villages are without a phone.

The communications minister said the government will "do everything" to reach its target of 100 million phone lines by 2004.

"It may seem it will take a miracle to reach this level but it is possible," Mr Mahajan told the India Economic Summit in the capital, New Delhi.