Information technology in India

Information technology in India is an industry consisting of two major components: IT services and business process outsourcing (BPO).[1] The sector has increased its contribution to India's GDP from 1.2% in 1998 to 7.5% in 2012.[2] According to NASSCOM, the sector aggregated revenues of US$147 billion in 2015, with export revenue standing at US$99 billion and domestic revenue at US$48 billion, growing by over 13%.[2] India's current prime minister Narendra Modi has started a project called 'Digital India' to help secure IT a position both inside and outside of India.



India's IT Services industry was born in Mumbai in 1967 with the establishment of Tata Group in partnership with Burroughs.[3] 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.[4]

The Indian economy underwent major economic reforms in 1991, leading to a new era of globalisation and international economic integration, and annual economic growth of over 6% from 1993–2002. The economic reforms were driven in part by significant internet usage in the country. 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.

Regulated VSAT links became visible in 1994.[5] Desai (2006) describes the steps taken to relax regulations on linking in 1991:

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.[6]

Contemporary situationEdit

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.[2] 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.[7]

Kamdar (2006) summarizes as follows:

Information technology is playing an important role in India today and has transformed India's image from a slow moving bureaucratic economy to a land of innovative

The IT sector in India is generating 2.5 million direct employments. India is now one of the biggest IT capitals of the modern world and all the major players in the world IT sector are present in the country.[8]

Future outlookEdit

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 meagre, however, this number is slowly on the rise. US giants outsourcing work to India do not outsource the high-end SDLC (Software Development Life Cycle) processes like requirement analysis, high-level design and architectural design, although some Indian IT players have enough competency to take up and successfully complete these high-level software jobs. 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. The growth is not fast-paced; this can largely be attributed to the lethargic attitude of the government in providing proper telecommunications infrastructure. While penetration levels for mobile usage are higher, the speed at which the backbone infrastructure works (network speed) and the coverage it offers are far below what other countries of the world currently offer.[9] According to Google estimates, the Indian community of developers will be the largest in the world by 2018.[10]

New directions in research and developmentEdit

Research in the industry was earlier concentrated in programming technologies 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 and to the growing demand for low-cost computing solutions.

Major information technology hubsEdit

Sharma (2006) states: "Today, Bangalore is known as the Silicon Valley 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 SEI-CMMI Level 5 Companies. 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.

Position City Description
1 Bangalore Bangalore is known as the Silicon Valley of India[11][12] 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, 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, the second-largest IT exporter in India, and the largest bioinformatics hub in India.[13][14][15][16] 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. Microsoft, Facebook, Apple Inc, Infosys, Google, Cognizant, Tata Consultancy Services, Computer Sciences Corporation, Accenture, Tech Mahindra, Wipro, HCL, Cyient, IGATE, Capgemini,, IBM, Dell, Deloitte etc., and close to 3000 companies operate from the city.
3 Chennai Some of the major companies with operation centers in Chennai are Accenture, Cognizant, TCS, Syntel, Wipro, Infosys, Verizon, HCL,, eBay, Paypal, Polaris, Patni, Capgemini and many major global providers. The city has a world-class IT infrastructure with dedicated expressway nicknamed as IT expressways, and many other IT parks promoted by both government and private entities. The city's strong industrial base also favors the establishment of many major R&D centers in its vicinity.
4 Mumbai Regarded as the financial capital of India, 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.
5 Delhi



The National Capital Region includes Delhi, Gurgaon and Noida, which are clusters of software development with offices of many multinational corporations such as TCS, Mahindra Comviva, Huawei, Symphony Teleca, Infosys, Cognizant, Ciena, Evalueserve, Pitney Bowes, MphasiS, Accenture, amdocs, HCL Technologies, Nagarro, Sapient, IBM, Hughes Systique Corporation, ThoughtWorks, Aricent, Oracle, SAP, Coriant and RBS.
6 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 Hinjewadi) is expected to scale up to phase 7. Pune is also known as the Tech City, which consists of many multinational corporations such as TCS, Tech Mahindra, Capgemini, Syntel, Infosys, Cognizant, Cybage, Capgemini, Persistent, MphasiS, Accenture, Wipro, HCL Technologies, Zensar, IBM, IGATE, Red Hat, Avaya, HSBC, BMC Software and Larsen & Toubro Infotech.
7 Kolkata Kolkata is one of the emerging Indian and international IT services and outsourcing exporters. The major IT hubs in Kolkata are located at Salt Lake Sector 5, New Town and Bantala which houses many multinational corporations such as TCS, Tech Mahindra, Capgemini, Cognizant, Capgemini, Accenture, Wipro, HCL Technologies, IBM, and HSBC.

Among Tier II cities, Thiruvananthapuram (Trivandrum), capital of Kerala state, is foremost in the growth of IT infrastructure. As the software hub of Kerala, it accounts more than 80% of the state's software exports.[17] Major campuses and headquarters of companies such as Infosys, Oracle Corporation, IBS Software Services and UST Global are located in the city. India's biggest IT company Tata Consultancy Services is building the country's largest IT training facility in Trivandrum, a project worth INR10 billion that will have the capacity for 10,000 seats[clarification needed]. The completion of the facility is expected in 2014 or 2015.[18]

Employment generationEdit

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.[19]

American diasporaEdit

Throughout the 1990s, another wave of Indian professionals entered the United States, consisting largely of highly educated, technologically proficient workers. The number of Indian Americans had reached 1.7 million by 2000. Within the United States, Indians fared well in science, engineering, and management. Graduates from the Indian Institutes of Technology (IIT) became known for their technical skills. The success of Information Technology in India had not only had economic repercussions but also far-reaching political consequences. India's reputation both as a source and a destination for skilled workers helped it improve its relations with a number of world economies. The relationship between economy and technology—valued in the Western world—facilitated the growth of an entrepreneurial class of immigrant Indians, which helped promote technology-driven growth.

See alsoEdit


  1. ^ Nirmal, Rajalakshmi. "IT's time for ctrl+alt+delete". The Hindu. Retrieved 2017-02-26. 
  2. ^ a b c "Indian IT-BPO Industry". NASSCOM. Retrieved 15 December 2012. 
  3. ^ "Special Economic Zones: Profits At Any Cost". Retrieved 22 July 2010. 
  4. ^ "Top 50 Emerging Global Outsourcing Cities" (PDF). Retrieved 22 July 2010. 
  5. ^ "Online Journal of Space Communication". Retrieved 2013-09-28. 
  6. ^ Inc, lbp (2013). India Telecom Laws and Regulations Handbook. Int'l Business Publication. p. 300. ISBN 1433081903. 
  7. ^ "Gartner Says Top six Indian IT Services Providers Grew 23.8 Percent In 2011". 2012-05-07. Retrieved 2013-09-28. 
  8. ^ Kamdar (2006)[better source needed]
  9. ^ MohanRaj, Prasanna; Niranjan and Snighdha (May 2014). "Indian I.T Industry — A Model based approach to a shift towards a Prominent Presence in the Global Market". Research Journal of Economics and Business studies. 3 (7). 
  10. ^ Google for Mobile Event 2015
  11. ^ Canton, Naomi. "How the 'Silicon' is bridging the digital divide". CNN. Retrieved December 6, 2012. 
  12. ^ RAI, SARITHA. "Is the Next Silicon Valley Taking Root in Bangalore?". New York Times. Retrieved March 20, 2006. 
  13. ^ "Hyderabad Pips Chennai, Pune in Software Exports". The New Indian Express. 
  14. ^ "CDFD to be Sun's first CoE in medical informatics". timesofindia-economictimes. 
  15. ^ Udgirkar, Trushna. "New innovation support centre to open in Hyderabad this month". 
  16. ^
  17. ^ "India's hottest IT destinations". Rediff Business. 5 March 2010. Retrieved 3 April 2017. 
  18. ^ "TCS to build a 10,000 seat learning campus in Kerala" (Press release). TATA Consultancy Services. 14 September 2010. Retrieved 10 November 2013. 
  19. ^ "Economic Times (2010), Are IT jobs losing sparkle?". 27 August 2010. Retrieved 30 August 2010. 

Further readingEdit

  • 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.