According to the National Association of software and services companies (Nasscom), India’s export revenues from software outsourcing have exceeded its target and will reach 17.3 billion dollars in the financial year 2004-05. In the financial year 2003-04, Indian software export was 12.8 billion dollars. Indian IT industry employs 7,70,000 people and it will continue to rise as the preferred destination of offshoring. Countries like China, Russia, the Philippines, and eastern European countries are competing but India will remain a preferred destination because of many reasons. A country like China has around 800 software companies out of which, only five has over 2000 employees. While on the other hand, India has just below 3000 software development companies and has over 15 IT companies with more than 2000 employees. It will take a few years for China to pose any threat to the leadership of its continental rival India in the field of software development.