Indian IT outsourcing giant Infosys is building a £154m campus in Hyderabad that will employ 25,000 people.

The campus at Pocharam in the central Indian city will be spread over 447 acres and be developed over 10 years in three phases.

Work is beginning on the first phase to build seating for 10,000 employees and Infosys says the campus will be energy and water efficient to support its bid to be carbon neutral.

Chairman of the board at Infosys, N R Narayana Murthy, said in a statement: "We are delighted to commence work on the new campus. The state government has worked at enhancing infrastructure facilities at Hyderabad to make it a premier IT destination globally."

Hyderabad was recently voted one of the world's top 20 tech hotspots in this exclusive silicon.com special report.

The expansion follows sluggish growth in the Indian outsourcing market, with Infosys reporting revenue of $1.16bn in its first quarter - up 24.5 per cent on the same period last year but falling short of the 40.6 per cent growth in the first quarter of 2007.

The new campus will bolster Infosys' existing 10,000-strong campus in Gachibowli, Hyderabad, which was built in 2001 and enjoys a wide range of facilities including a gym, swimming pool, health clinic, grocery store and health clinic.

It comes as analyst Evalueserve predicts that India's revenue from its IT industry is likely to grow sixfold to $193.1bn over the next seven to eight years, making it the second largest IT services labour pool after the US.