International Business Machines Corp is expanding in India and grabbing enough customers to take the top spot in the country's domestic information-technology market from local rivals.

While Tata Consultancy Services Ltd and Infosys Technologies Ltd have won over US companies with cheaper labor and low capital costs, IBM snapped up contracts with some of India's largest companies, such as wireless carrier Bharti Airtel Ltd. The strategy will yield dividends for IBM over time as India's economy thrives, Kaufman Bros.'s Karl Keirstead said.

"They've beaten their competition relatively handily," said the New York-based analyst, who pointed to IBM's brand name and experience as draws for potential clients. "There's a cachet in using IBM."