The Indian conglomerate Tata is establishing a software house in Israel that should employ 500 developers within three years, says Shmuel Blank, heads of TCS Israel, the Israel arm of Tata's information technology firm.

TCS Israel uses teams of engineers from Israel, India, China, Europe and South America. Its policy has raised accusations that development activities are being outsourced from Israel overseas, at the expense of Israeli workers. Blank rejects the claim, saying that the international texture enables the firm to offer more services. In addition, he said, the project managers are for the most part Israeli.

"We are developing an employment center for Israelis here, and establishing a development center," Blank added. "A few dozen Israelis are already employed at the center. We are aiming to reach 500 employees, which I believe will take at least three years."

TCS made the decision to begin operating in Israel about two-and-a-half years ago. The company is a publicly-traded firm with a market cap of about $30 billion and net profits of about $1 billion. Unlike its activities overseas, the Israeli branch was established before the firm had done any business with local customers. The firm has invested $2 million in establishing its Israeli branch, and has since enlisted some large customers in Israel, such as Teva, Zim and El Al. The Israeli operations generate tens of millions of dollars in activity annually, and the branch is considered one of the most profitable in TCS's international activity.

TCS is currently vying for a multi-million dollar tender to computerize the life insurance and pension activity of one of the largest insurance firms in the country.