Bangalore is at the heart of India's IT industry

Universities should improve courses, said Kiran Karnik, head of the National Association of Software and Service Companies (NASSCOM).

NASSCOM foresees a shortage of 262,000 professionals, raising fears India could lose out to other countries.

Mr Karnik also sought to allay fears that US politicians may promise to limit outsourcing.

The issue of outsourcing has become an increasingly hot one ahead of the US elections - both presidential and congressional - in November, igniting concerns about a protectionist move to limit trade in services.

"Not a single law has so far actually constrained moving work (to offshore centres)," Mr Karnik told a software conference in Bangalore.

Struggle to stay ahead

The more pressing concern for India's IT and outsourcing industry may, however, prove to be the need to train more graduates.

Infosys is one of India's biggest software companies

"There are two and a half million graduates every year in India," Mr Karnik said. "(But) the employable pool in this is very, very small. We are working with the universities to train people better."

"We are ahead but in five to 10 years, we will need more people with doctorates," he added.

His comments are supported by a recent Gartner report, which suggested that unless India outlines a strategy for its outsourcing industry, south east Asian countries could eat into its global market share.

The country's software exports are set to grow by 30% in the year to March 2005.

India's IT and outsourcing industries exported goods and services worth $12.5bn (�7bn) in the 2003-2004 fiscal year.

Outsourcing contributed 29% to India's total software exports.