by Monica Gupta BBC correspondent in Delhi

Indian software industry association Nasscom has said it is hopeful the recovery in the US economy will help to cool the present backlash against outsourcing work to India.

Recent months have seen several attempts in the US to introduce laws to restrict the awarding of software contracts to companies in India.

Although none of these attempts have succeeded, the moves have caused concern in the Indian software industry.

"We are not worried but concerned. So far we have not seen our business being impacted," said Nasscom chief Kiran Karnik.

"But we feel that with an improvement in the US economy and a pick-up in jobs there, this will no longer be an upfront issue during its Presidential election.

"At present the popular mood in the US seems to be the concern over loss of jobs," he added.

Ensuring quality

Despite attempts in the US to restrict outsourcing to India, the Nasscom chief said growth prospects for the Indian software sector during 2004 appeared "strong".

"During the financial year 2002-03, the Indian software sector grew by 26% and we are hopeful that during the current fiscal year we will be able to sustain the same growth rate," he said.

Asked about recent reports in the media which questioned the quality of services outsourced to India, Mr Karnik said: "This is a non-issue as international companies are still bringing their work to India.

"But we are working with some universities in the US to try an evolve a internationally acceptable quality standard for BPO (Business Process Outsourcing) industries."

Mr Karnik said the Indian IT sector was looking for opportunities to engage with US associations in areas such as cyber terrorism and data protection.

Targeting China

Nasscom says another area of focus this year would be closer cooperation with China.

Many analysts feel there could be a good fit between India and China, given India's strong presence in the software sector and China's expertise in the hardware sector.

"Already several Indian software companies are moving to China to provide IT-based services to the multinational companies present there," Mr Karnik said.