Intel Corporation announced this week the establishment of a $250 million venture capital fund to help stimulate technological innovation in India and drive continued growth of the country’s Information Technology (IT) industry.

“The pace of technology innovation is accelerating,” said Intel Chairman Craig Barrett. “Through the Intel Capital India Technology Fund, Intel will help Indian companies drive technology adoption locally and identify new business opportunities globally.”

The fund will be used to invest in companies that can benefit from the rapid growth in the domestic IT market segment in India, and provide local businesses with capital to help nurture important technologies and products developed for local use. Intel Capital will also use the fund to selectively invest in technology-oriented service companies that target overseas market segments using India’s highly talented resource base. Examples of initial focus areas include cellular communications, broadband applications and wireless technologies.

“Intel Capital consistently invests ahead of the curve, and we feel that the timing to launch a fund in India could not be more ideal,” said Arvind Sodhani, president of Intel Capital. “Intel Capital plays a critical role in Intel’s wide-ranging efforts to stimulate technological innovation and grow the IT industry in India. We anticipate that the establishment of the India Technology Fund will inspire even more innovative business models among Indian entrepreneurs, help accelerate technology adoption locally, and foster the development of innovative technologies with potential for global distribution.”

Intel Capital made its first strategic investment India in 1998 and since then has invested in more than 40 Indian companies across seven cities. Several of these companies have since gone public or have been acquired. These include two that were acquired by other firms last year: Deccanet Designs, a communications design and software services company, and FutureSoft, a telecommunications product and services company. India Infoline.com Ltd., an online portal, and Sasken Communication Technologies Ltd., a telecommunications product and services company, went public on the Indian stock market this year.

Other notable examples of current Intel Capital investments in India include NIIT, a global IT learning solutions company; Nipuna Services Ltd., a business process outsourcing provider; and Tejas Networks, a telecom products company for the Indian market segment.

Intel Capital focuses on making equity investments and acquisitions to grow the Internet economy in support of Intel’s strategic interests. Intel Capital invests in hardware, software and services companies in several market segments, including computing, networking and wireless communications.