Amidst all the gloomy talk of reduced outsourcing in the face of a general economic downturn, the news of Pune-based Indian IT major Tech Mahindra winning a $350- million deal from BT must surely sound as music to the ears for the Indian outsourcing industry.

Of course, it does increase Tech Mahindra's increasing dependence on a single client after the $ 1-billion deal signed with the telecom major earlier, but any deal in this morose economic climate is sure to bring cheers all around.

Moreover, the work involved is also quite different as compared to the previous agreement, according to Clive Selley, managing director, BT Worldwide Business.

Although both the deals are spread over a period of five years, the new deal focuses on ''application support and maintenance'' supporting retail, wholesale and global services businesses, while the previous agreement, in Selley's words, was about assisting BT ''in delivering major global customer deals and delivering the IT elements of those deals''.

Expectedly, the Tech Mahindra management is quite excited about this deal, which reposes faith in the quality of their work. Sanjay Kalra, president, Tech Mahindra, was quite enthusiastic when he said, ''This deal showcases Tech Mahindra's strengths in delivering business critical services that have so far been hidden under ''business-as-usual'' application support. We are delighted at the confidence BT has shown in us and this contract will further strengthen trust and partnership between our two companies.''

In addition, for those reeling under the news of recent job cuts at TCS and IBM, the news of Tech Mahindra ramping up its headcount to service this deal is manna from heaven.

Selley said that in spite of Tech Mahindra having a ''very large workforce of personnel that are highly skilled in many of the areas covered by this deal'', expects ''that they will augment that headcount, in order to meet the new scale that they are undertaking''. Tech Mahindra has also said that employees at its existing centres in India will service the new deal, with a new office being also set up in the UK for the purpose.

Tech Mahindra Ltd, formerly known as Mahindra British Telecom (MBT), is a joint venture between Mahindra & Mahindra Limited (M&M) and British Telecommunications plc (BT), UK. It is headquartered in Pune and has offices throughout the world. Presently, it is the sixth-largest software exporter in India and specialises in the telecom domain.

Tech Mahindra had listed on the Indian bourses in August 2006 at a considerable premium above its issue price and had performed exceedingly well after that. However, after the market mayhem today, Tech Mahindra shares closed down 3.39 per cent at Rs.622.80 on the Bombay Stock Exchange.

BT Group plc (formerly British Telecommunications plc) is the privatised UK state telecommunications operator. It is the dominant fixed line telecommunications and broadband Internet provider in the United Kingdom. BT operates in more than 170 countries and almost a third of its revenue now comes from its Global Services division, making it one of the largest telecom companies in the world.