Bangalore: Japan is an attractive information technology (IT) destination for India because of its potential and lack of penetration and there is opportunity for Japanese companies to expand the sourcing of software from the present four per cent to 15-20 per cent by 2004, chairman of Wipro Azim Premji said on December 19.

However, language is a major barrier and Japanese being a difficult language to master, Indian companies have to create more language training centres in India for software engineers. Wipro has 150 engineers who have been trained in Japanese, Premji said.

By and large there is "active interest on part of Japanese companies to get some movement in terms of working with Indian companies", he said.

Offshore outsourcing is gaining acceptance in Japan and Japanese companies can leverage Indian companies' experience in the United States and Europe to benefit from software outsourcing, he said while speaking at the 31st joint meeting of the Indo-Japan Business Co-operation Committees (IJBCC), organised by Federation of Indian Chambers of Commerce and Industry (FICCI) in Bangalore.

Japan is the world's second largest IT services market accounting for 12 per cent of world's IT services spending. While the embedded system, which has the strongest potential in Japan, is likely to face a threat from China, Premji said, quoting a McKinzey report.

Besides Japan, Germany, France, Canada and Italy are the other key target markets for Indian companies. China, which is a major competitor for India, has to face tough challenges not only in terms of pricing but also "meeting India's standards on quality, technology and execution of quality management", he said.

PTI