This chapter discusses the role of network relationships in the internationalization of small knowledge-intensive firms (SKIFs) by highlighting their local, spatially concentrated network relationships, which can serve as a significant local resource. Little is known in this regard with respect to a developing economy context. Primarily on the basis of a study of four case-firms in Bangalore software industry and available secondary data, two issues are dealt with: (a) how local network relationships – such as those within clusters or industrial districts – are developed and (b) the impact that these relationships have on the internationalization of SKIFs, namely, reputation-related, quality-related and networking benefits. However, it also emerged from follow-up interviews with local academic experts that these benefits may be passively rather than actively accrued, suggesting that some local resources may be overlooked or wasted.