IBM, already India’s largest foreign employer, today revealed a plan to raise its investment in the country threefold to $6 billion (£3.2bn) over the next three years.

The move makes the IT services group the largest of a string of American companies to invest heavily in the region, attracted by India's highly skilled workforce and much cheaper labour costs than found in the West.

IBM’s chairman and chief executive Sam Palmisano said the investment will be used to build service delivery centres in Bangalore, India’s technology hub, and create a telecommunications research and innovation centre in New Delhi.

In the past three years, IBM has invested more than $2 billion in India and increased staff in the region from 9,000 to 43,000. The expansion has made India IBM’s second-largest base of operations, trailing only the US, where 125,000 of IBM’s 330,000 staff are based.

IBM Global Services is the world's and also India's largest IT services provider. The unit covers sectors ranging from consultancy to technology design and training.

"India and other emerging economies are [an] increasingly important part of IBM’s global success," Mr Palmisano told some 10,000 IBM employees and financial analysts at the company’s Bangalore facility.

The new investment "will ensure we make the most of the opportunities to grow this marketplace while it enables IBM to fulfil its vision to become a globally integrated company," he added.

"If you are not here in India making the right investment ... then you won’t be able combine the skills and the expertise here with skills and expertise around the world in ways that can help our clients be successful," he said.

"I am here today to say that IBM is not going to miss this opportunity."

Despite fears over wage inflation rates in India - where wages for software engineers are rising by as much as 20 per cent a year - the country has drawn a fresh round of investment in recent months. Microsoft said in December that it would double its work force in India with an investment of $1.7 billion in four years.

Shortly afterwards Intel, the world’s largest computer-chip maker, announced a $1 billion investment, weeks after a group of expatriate Indians said they would spend $3 billion to build a chip-making facility with technology from Advanced Micro Devices, Intel’s main rival.

Cisco Systems has also said it plans to invest $1.1 billion in India over the next three years.

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