The new product will sound India's entry into core software technology as the nation so far has concentrated mostly on the applications and services side of the industry, the sources said.

Indian companies have a software product designing capability but not of a sophisticated nature. "The government, with this project, intends to demonstrate the future path of value addition in software industry for the private sector in India."

"The software, of which primitive prototypes have already been developed, will be split into components and can be hosted on the internet enabling users to have on-line, round-the-clock development of design," they said.

This will be in syncwith the highest priority in the global software industry -- componentisation of software development.

In the initial stages, the testing ground for the new product will be India. "After a certain number of tests, the product will be sold abroad."

Claiming that NIC's CAD/CAM will be based on new codes, modules and, in fact, a new architecture, the sources said the Indian product will slowly replace the existing CAD/CAM software structure developed in 1970s.

For the first time, a CAD/CAM software will be Web-enabled as the product will be divided into components and hosted on the internet.

NIC's product will have to compete with three dominant players in CAD/CAM market worth billions of dollars. Parametric Technology Corporation's Pro Engineer is the market leader in terms of units shipped while ideas of SDRC and CADDS of Computer Vision are the other major players.

Norwegian agency Nurad has sanctioned about 17 million kroners (about $2.5 million) for the project, NIC sources added.

Also, theproduct being Web-enabled will greatly popularise use of CAD/CAM in designing and manufacturing. It will eventually cut production costs and time.

"Since the product will be an internet application software, the user need not invest in a prohibitively costly stand-alone CAD/CAM. The client can simply download the required software from the internet, work on and update his work to be put in continued use in other parts of the globe."