Information technology in India is an industry consisting of two major components: IT services and business process outsourcing (BPO). The sector has increased its contribution to India’s GDP from 1.2% in 1998 to 7.5% in 2012. According to NASSCOM, the sector aggregated revenues of US$160 billion in 2017, with export revenue standing at US$99 billion and domestic revenue at US$48 billion, growing by over 13%. USA accounts for more than 60 per cent of Indian IT exports.
India’s IT Services industry was born in Mumbai in 1967 with the establishment of the Tata Group in partnership with Burroughs. The first software export zone, SEEPZ – the precursor to the modern-day IT park – was established in Mumbai in 1973. More than 80 percent of the country’s software exports were from SEEPZ in the 1980s.
The Indian economy underwent major economic reforms in 1991, leading to a new era of globalization and international economic integration, and annual economic growth of over 6% from 1993–2002. The new administration under Atal Bihari Vajpayee (who was Prime Minister from 1998–2004) placed the development of Information Technology among its top five priorities and formed the Indian National Task Force on Information Technology and Software Development.
Wolcott & Goodman (2003) report on the role of the Indian National Task Force on Information Technology and Software Development:
Within 90 days of its establishment, the Task Force produced an extensive background report on the state of technology in India and an IT Action Plan with 108 recommendations. The Task Force could act quickly because it built upon the experience and frustrations of state governments, central government agencies, universities, and the software industry. Much of what it proposed was also consistent with the thinking and recommendanotions of international bodies like the World Trade Organization (WTO), International Telecommunications Union (ITU), and World Bank. In addition, the Task Force incorporated the experiences of Singapore and other nations, which implemented similar programs. It was less a task of invention than of sparking action on a consensus that had already evolved within the networking community and government.
In 1991 the Department of Electronics broke this impasse, creating a corporation called Software Technology Parks of India (STPI) that, being owned by the government, could provide VSAT communications without breaching its monopoly. STPI set up software technology parks in different cities, each of which provided satellite links to be used by firms; the local link was a wireless radio link. In 1993 the government began to allow individual companies their own dedicated links, which allowed work done in India to be transmitted abroad directly. Indian firms soon convinced their American customers that a satellite link was as reliable as a team of programmers working in the clients’ office.
Videsh Sanchar Nigam Limited (VSNL) introduced Gateway Electronic Mail Service in 1991, the 64 kbit/s leased line service in 1992, and commercial Internet access on a visible scale in 1992. Election results were displayed via National Informatics Centre’s NICNET.
“The New Telecommunications Policy, 1999” (NTP 1999) helped further liberalise India’s telecommunications sector. The Information Technology Act, 2000 created legal procedures for electronic transactions and e-commerce.
A joint EU-India group of scholars was formed on 23 November 2001 to further promote joint research and development. On 25 June 2002, India and the European Union agreed to bilateral cooperation in the field of science and technology. India holds observer status at CERN, while a joint India-EU Software Education and Development Center will be located in Bangalore.
Contemporary situation[edit source]
In the contemporary world economy India is the second-largest exporter of IT. Exports dominate the Indian IT industry and constitute about 77% of the industry’s total revenue. However, the domestic market is also significant, with robust revenue growth. The industry’s share of total Indian exports (merchandise plus services) increased from less than 4% in FY1998 to about 25% in FY2012. The technologically-inclined services sector in India accounts for 40% of the country’s GDP and 30% of export earnings as of 2006, while employing only 25% of its workforce, according to Sharma (2006). According to Gartner, the “Top Five Indian IT Services Providers” are Tata Consultancy Services, Infosys, Cognizant, Wipro, and HCL Technologies.
Future outlook[edit source]
The Indian IT market currently focuses on providing low-cost solutions in the services business of global IT. The presence of Indian companies in the product development business of global IT is very meager, however, this number is slowly on the rise. The other prominent trend is that IT jobs, once confined to Bangalore, are slowly starting to experience a geographical diffusion into other cities like Chennai, Hyderabad and Pune. According to Google estimates, the Indian community of developers will be the largest in the world by 2018.
New directions in research and development[edit source]
Research in the industry was earlier concentrated in Programming languages like Java, but in the recent times the research focus has changed towards technologies like Mobile computing, Cloud computing and Software as a Service. This shift is attributed to the preference of clients for ubiquitous computing over standalone computing.
Major information technology hubs[edit source]
Sharma (2006) states: “Today, Bangalore is known as the Silicon Platuea of India and contributes 38% of Indian IT Exports. India’s second and third largest software companies are headquartered in Bangalore, as are many of the global Companies. Cities like Hyderabad, Chennai, Pune and Gurgaon are also emerging as technology hubs, with many global IT companies establishing headquarters there. Numerous IT companies are also based in Mumbai.
|1||Bangalore||Bangalore is known as the Silicon Valley of India and the IT Capital of India. It is considered to be a global information technology hub and it is India’s largest exporter both of IT overall and of software. Some of the top Indian IT service providers like Infosys, Wipro, Mindtree and Mphasis are headquartered in Bangalore. It is also the site of the national headquarters of many top international firms like Intel, Texas Instruments, Bosch, Yahoo, SAP Labs,Google India, EA, Apple Inc, SanDisk, Harman, Dell, Ericsson, Sabre, Goldman Sachs, HP, Cognizant, Boeing, Wells Fargo, Sony, AT&T, Flipkart, Walmart,Juniper Networks Inc, CenturyLink, Aricent, Samsung, Oracle, LG, Adobe, JPMorgan, Genpact, Accenture, IBM, Qualcomm, Cisco, LBrand, PayPal, Ebay, Quest, Broadcom, Cerner, EY, Amazon, LinkedIn, BT, and Continental, among others. Bangalore alone accounts for more than 35% of all IT companies present in India and contains close to 5,000 companies, making it India’s largest IT contributor.|
|2||Hyderabad||Hyderabad – known as the HITEC City or Cyberabad – is a major global information technology hub, and the largest bioinformatics hub in India. Hyderabad has emerged as the second largest city in the country for software exports pipping competitors Chennai and Pune. It is the site of the first Microsoft development center in India, which is also Microsoft’s largest software development center outside of its headquarters in Redmond, USA.It has also many IT industries as Amazon(which is also a biggest outlet outside its headquarters). Google, Microsoft, Facebook, Apple, Wipro, Infosys, Oracle, franklin templeton, jp morgan, HSBC, wells fargo, Tech mahindra, and many more big it companies.India headquarters of Google, Facebook, Apple are locates in Hyderabad. Hyderabad is Largest Deloitte hub of India .The new government of Telangana is welcoming new investers and also supporting the small scale industries through T-HUB.It contains close to 3,000 companies, making it India’s second largest IT contributor|
|3||Pune||Pune is one of the leading Indian and international IT services and outsourcing exporters. The next biggest IT park of India (Rajiv Gandhi IT Park at Hinjawadi) is expected to scale up to phase 7.|
|4||Chennai||The city has a world-class IT infrastructure with dedicated expressway nicknamed as IT expressways, and many other IT parks promoted by both government agency (Elcot) Electronics Corporation of Tamil Nadu and private entities. The city’s strong industrial base also favors the establishment of many major R&D centers in its vicinity.|
|5||Mumbai||Mumbai is headquarters to Tata Consultancy Services, India’s largest IT company. Other major IT companies based in the city include Datamatics, Patni, L&T Infotech, 3i Infotech, Mastek and Oracle FinServ.|
|6||National Capital Region||The National Capital Region includes Delhi, Gurgaon and Noida, which are clusters of software development with offices of many Multi National Corporations.|
|7||Others||Telangana which includes Warangal and Khammam.,Gujarat which includes Ahmedabad and Vadodara,
Kerala where 80% of the exports come from its capital city Trivandrum and the rest from smaller hubs like Kochi and Calicut. Trivandrum houses Technology giants like Oracle Corporation, TCS, Infosys, Toonz, UST Global, Ernst & Young, Flytxt, etc.
Employment generation[edit source]
The IT sector has also led to massive employment generation in India. The industry continues to be a net employment generator — expected to add 230,000 jobs in fiscal year 2012, thus directly employing about 2.8 million people and indirectly employing 8.9 million, making it a dominant player in the global outsourcing sector. However, it continues to face challenges of competitiveness in the globalised and modern world, particularly from countries like China and Philippines.
India’s growing stature in the Information Age enabled it to form close ties with both the United States and the European Union. However, the recent global financial crises have deeply impacted Indian IT companies as well as global companies. As a result, hiring has dropped sharply, and employees are looking at different sectors like financial services, telecommunications, and manufacturing, which have been growing phenomenally over the last few years.
With fundamental structural changes visible everywhere in the IT services due to Cloud computing, proliferation of Social media, Big data, Analytics all leading to digital services and digital economy, many of the leading companies in India’s IT sector reported lower headcounts in their financial results.
See also[edit source]
- Electronics and semiconductor manufacturing industry in India
- Supercomputing in India
- HITEC City
- List of Indian IT companies
- First IT Company in Rupnagar
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Further reading[edit source]
- Eijaj, Steve, E-Commerce. (2006: from Computers and Information Systems), Encyclopædia Britannica 2008.
- Chand, Vikram K. (2006), Reinventing public service delivery in India: Selected Case Studies, Sage Publications, ISBN 0-7619-3489-8.
- Desai, Ashok V. (2006), “Information and other Technology Development”, Encyclopedia of India (vol. 2) edited by Stanley Wolpert, pp. 269–273, Thomson Gale, ISBN 0-684-31351-0.
- Kamdar, Mira (2006), “Indo -U.S. Relations, Cultural Exchanges in”, Encyclopedia of India (vol. 2) edited by Stanley Wolpert, pp. 236–239, Thomson Gale, ISBN 0-684-31351-0.
- Kapur, Devesh (2006), “Diaspora” in Encyclopedia of India (vol. 1) edited by Stanley Wolpert, pp. 328–331, Thomson Gale, ISBN 0-684-31350-2.
- Ketkar, Prafulla (2006), “European Union, Relations with (Science and technology)”, Encyclopedia of India (vol. 2) edited by Stanley Wolpert, pp. 48–51, Thomson Gale, ISBN 0-684-31351-0.
- Nanda, B. R. (2006), “Nehru, Jawaharlal”, Encyclopedia of India (vol. 3) edited by Stanley Wolpert, pp. 222–227, Thomson Gale, ISBN 0-684-31352-9.
- Rothermund, Dietmar (2006), “Andhra Pradesh”, Encyclopedia of India (vol. 1) edited by Stanley Wolpert, pp. 43–44, Thomson Gale, ISBN 0-684-31350-2.
- Saraswati, Jyoti. Dot.compradors: Power and Policy in the Development of the Indian Software Industry. London: Pluto, 2012. ISBN 9780745332659.
- Sharma, Jagdish (2006), “Diaspora: History of and Global Distribution”, Encyclopedia of India (vol. 1) edited by Stanley Wolpert, pp. 331–336, Thomson Gale, ISBN 0-684-31350-2.
- Sharma, Shalendra D. (2006), “Globalization”, Encyclopedia of India (vol. 2) edited by Stanley Wolpert, pp. 146–149, Thomson Gale, ISBN 0-684-31351-0
- Vrat, Prem (2006), “Indian Institutes of Technology”, Encyclopedia of India (vol. 2) edited by Stanley Wolpert, pp. 229–231, Thomson Gale, ISBN 0-684-31351-0.
- Wolcott, P. & Goodman, S. E. (2003), Global Diffusion of the Internet – I India: Is the Elephant Learning to Dance?, Communications of the Association for Information Systems, 11: 560-646.