Business conditions will be tough for software service firms in 2003 as corporations squeeze infotech spending in a bid to control costs, a senior official at India's Tata Consultancy Services said on Thursday.

"It's a cost reduction-based strategy, which global corporates are following. So we expect market conditions to be still weak in terms of growth," said S Ramadorai, chief executive of TCS.

The TCS chief was speaking to reporters in Singapore after unveiling an industrial product developed jointly with the Singapore Institute of Manufacturing Technology.

Unlisted TCS, part of India's Tata industrial empire, is one of Asia's biggest software service firms, with revenues of over $880 million and clients such as American Express Co, General Electric Co and Lehman Brothers Holdings Inc.

The company is set to go public in 2003 in India's most eagerly awaited initial public offering.

Ramadorai said revenues of most Indian software firms will grow by 20-30 per cent in the year to March 31, 2003 in line with the growth in the industry.

But analysts say profit margins in the sector are tightening.

"Pricing pressures in our opinion will continue because it's still not growth-oriented IT investment," Ramadorai said.

He said TCS plans to boost staff levels by 15 per cent and hire 3,000 software professionals in India and its overseas development centres to take the total strength to 23,000 by March 2004.

Girija Pande, TCS's head of Asia-Pacific operations, said the company had hired 100 Chinese software engineers for its China development centre and would hire eight to 10 Singaporean programmers in the near future.