German software major SAP today said that it plans to invest $1 billion over the next five years to expand its presence in India.

The move is part of the company's decision to make India a strategic hub in the Asia-Pacific region.

The company also plans to increase its headcount in India to 3,500 by the end of 2006 from 2,750 employees currently.

The number of employees is expected to double over the next five years.

Mr Henning Kagermann, CEO and Executive Board Member of SAP AG, today inaugurated the company's new office in Gurgaon.

He said: "India is a vital component of SAP's research and development and global services and support network. The quality of talent, innovation and performance coming from India is truly impressive and our additional investments are designed to harness more of the same. By the end of this year India will make up a significant 20 per cent of the global R&D pie."

In India, SAP has research and development centres at Bangalore and Gurgaon.

The company has already invested $500 million in its Indian facilities since 1998.

The new Gurgaon office will house 250 employees by the end of 2006.

Mr Kagermann said that the company had set a target of reaching 15,000 customers by 2010 from 1,000 currently.

SAP is eyeing the e-governance projects being launched by the various State Governments and public sector units.

The company is also setting up a centre of excellence in Gurgaon specifically for the public sector to showcase applications that enable e-governance.

It aims to increase the number of certified consultants from 31,000 currently to one lakh in five years.

"India continues to grow in its importance to SAP globally. As one of our top eight strategic markets globally and now a strategic hub in the region, we are seeing phenomenal growth in demand for our solutions from Indian enterprises," said Mr Kagermann.

SAP's Indian unit has the second largest employee base across the company's global operations.

SAP India Labs is among the four global development hubs of the company.

The company will also set up a centre of excellence in the retail and SME focus areas.