Polaris leads Indian software West

The deal with the German software developer will give the Indian company an 18.7 per cent stake and marks the latter's shift to Europe as US markets threatens to slow down.

Europe accounts for about 23 per cent of Indian software exports, while the US accounts for 60 per cent. Indian software and services association Nasscom estimates that total software exports this year will be worth $95bn.

Some observers feel that a downturn in the US would make companies there turn more to outsourcing and maintain the country's position as India's major market.

This year, two large Indian software companies, Satyam Computer Services and Wipro Technologies, have expanded their UK development centres.