This year it would touch a billion dollars, most of which are originating from the United States, "Newsweek" magazine reports, quoting Mr Vishnu Varshney, chairman of the Indian Venture Capital Association.

By 2008, it is expected to jump to $10 billion, says McKinsey & Company."If you want cheap labour, go to China. If it's cheap intellect you want, India is the place," an American venture capitalist Mr Norman Prouty said.

As in the US, says Newsweek, India's IT industry is gradually becoming an engine of economic growth. The flow of new investment money leads to the creation of new companies, which in turn spins out jobs and wealth in a country in need of both.

"India is standing where the US was in the 1980s or Israel in the early 1990s," says eVenture's chief executive officer Mr Neeraj Bhargava.

"Information technology is India's oil. You can smell the electricity in the air," he says.

India's business culture, says Newsweek, is conservative but the influx of venture capital has changed the way people think about risk.

More than ever, young, well-educated graduates are willing to roll the dice. "There's been an explosion in entrepreneurship," says Mr Sudhir Sethi, Managing Director of Mumbai-based Walden International Group, a $23 million venture fund that has bankrolled 12 new companies in 18 months. Technology stock prices, Newsweek notes, have collapsed everywhere in recent months but analysts and investors remain bullish on India's IT prospects.