Japanese information technology companies are mapping out a new base to outsource software development in India, according to Nihon Keizai Shimbun.

Japanese firms, which have long shifted their software development to China for low costs, are now faced with a lack of local engineers and deciding to expand their India operations.

With 2,000 engineers to be hired locally by 2009, Fujitsu Ltd plans to develop industrial software for Japanese financial institutions, while Hitachi Ltd is to increase the number of employees by 15 percent for development of more advanced software, the Japanese business daily said.

Fujitsu decided to directly hire 500 engineers who currently receive outsourced work at local developers to improve quality control and provide thorough training.

The company plans to hire 1,500 more engineers by March 2010 for its own development projects at the Indian operations of US company Rapidigm, which Fujitsu acquired in February.

The Japanese electronics company is expected to increase its overseas employees by 2.5 percent to 5,000 people in India, China and the Southeast Asian region, the paper said.

Hitachi also plans to expand its engineering staff from 470 to 540 in India for development of middleware programmes by the end of March 2007.

NEC Corp, which is to form a team of 400 engineers, plans to develop control software for mobile phones in a joint venture with a local partner to have India as its second hub for overseas operation.