Samuel Palmisano, chairman and chief executive, told a software conference in Bangalore that IBM would use the money to create “service delivery centres” in the southern Indian city, allowing engineers to operate computer network management systems for clients worldwide. It also planned to build a telecoms research centre, he said.

“India and other emerging economies are an increasingly important part of IBM’s global success,” Mr Palmisano said. “IBM is not going to miss this opportunity.”

India generated $510 million in sales for IBM last year, according to regulatory filings. First-quarter sales in India rose 61 per cent, outpacing total sales growth of 4 per cent.

Yesterday was the first time that IBM had held its annual analysts’ meeting outside its American home market. IBM’s Indian operation is its largest outside the United States, with 43,000 employees in 14 cities. In 2004 IBM bought Daksh, India’s third-largest outsourcing company, to cement its position in the market.

According to a survey by India’s National Association of Software and Service Companies (Nasscom), IBM is the outsourcing market’s fifth-biggest player. Kiran Karnik, the president of Nasscom, said: “India’s become not just an important or crucial part — it’s become an absolutely essential part of their global delivery chain.”

IBM’s announcement sent it deeper into political debate in the United States about whether outsourcing is costing white-collar jobs at home. Workers in India earn, on average, an eighth of the wages of their American counterparts and, amid growing pressures to cut costs, many US companies are taking advantage of India’s highly educated, English-speaking workforce to provide back-office services.

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