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The purpose of this paper is to assess the nature of competition in the information technology (IT) services sector between India and China. Using primary and secondary data sources, we compare and contrast the strengths and weaknesses of the IT services sector in the two countries along the main dimensions of Porter's competitive advantage model. The principal findings indicate that the IT services sectors in the two countries are distinctively different, have developed along different paths and are highly complementary to each other. China has a well-established hardware sector and its IT services sector focuses mostly on servicing its domestic market. India's IT services sector is predominantly export orientated with focus on the US and Western European markets. Contrary to popular beliefs, given the complementary characteristics of the IT services sectors in India and China, it is unlikely for the two countries to compete against each other in the near future and greater strategic co-operation between IT service providers in the two countries is a more likely outcome. [ABSTRACT FROM AUTHOR]