This morning I caught a taxi at 4.45am to go to the studios of BBC World, so I could talk about the annual results of Indian hi-tech giant Infosys on the World Business Report programme.  The market view up to yesterday was that rising salaries, the rising strength of the rupee, and a shortage of labour would start causing a serious issue for Infosys – and as the other major Indian IT companies won’t report results until next week, the Infosys results are seen as an indicator for the entire industry. This was the line that the BBC had planned to report on, that the industry might need to take a breather and regroup before growing further, yet we got the results about five minutes before the show went live on air at 5.30am and had to completely change the interview questions and approach.

Infosys managed to beat all analyst expectations to declare a 67 per cent increase in profit over the last quarter. The word in the City was that they would possibly manage 50-53 per cent, so this is an impressive rise in fortunes. Business is booming for the second-largest software exporter in India and these numbers prove that there is still a lot of strength left in the Indian outsourcing story.

It’s not such a surprise in my opinion. If you just look at some of the posts I have made to this blog recently you can see that I’m not so concerned about perceived labour shortages in India. What is really interesting now though is that the Indian companies are managing to ride out the negative perceptions and are winning larger and larger contracts, really moving into the territory of the big boys.

When you look at the technology export sector in India as a whole, it’s no surprise that Infosys is still growing strongly. Software services exports have been around $33bn in the past year and are predicted to rise to twice that figure by 2010 – growth is generally still strong. If Nasscom (the technology trade association in India) can focus on ensuring the infrastructure is strong enough to keep on providing enough new people to the industry then there is no sign of the Indian tech companies slowing down. Just imagine what they could do if they could market themselves more effectively; the incumbent global service companies have a lot to fear.