Information technology in India

Information technology in India

The Indian Information Technology industry accounts for a 5.19% of the country's GDP and export earnings as of 2009, while providing employment to a significant number of its tertiary sector workforce. However, only 2.5 million people are employed in the sector either directly or indirectly. In 2010-11, annual revenues from IT-BPO sector is estimated to have grown over $54.33 billion compared to China with $35.76 billion and Philippines with $8.85 billion.[1] It is expected to touch at US$225 billion by 2020. The most prominent IT hub are Bangalore and Hyderabad. The other emerging destinations are Chennai, Coimbatore, Kolkata, Kochi, Pune, Mumbai, Ahmedabad, NCR. Technically proficient immigrants from India sought jobs in the western world from the 1950s onwards as India's education system produced more engineers than its industry could absorb. India's growing stature in the Information Age enabled it to form close ties with both the United States of America and the European Union. However, the recent global financial crises has deeply impacted the Indian IT companies as well as global companies. As a result hiring has dropped sharply, and employees are looking at different sectors like the financial service, telecommunications, and manufacturing industries, which have been growing phenomenally over the last few years.[2] 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 was set up here way back in 1973, the old avatar of the modern day IT park. More than 80 percent of the country's software exports happened out of SEEPZ, Mumbai in 80s.[4]

India PC Market Share Estimates for Second Quarter of 2011

Source Date Dell Acer HP Lenovo HCL Others References
Gartner Q2/2011 16.7% 12.1% 11.2% 10.4% 6.6% 43.0% [5]



The Indian Government acquired the EVS EM computers from the Soviet Union, which were used in large companies and research laboratories. In 1968 Tata Consultancy Services—established in SEEPZ, Mumbai[3] by the Tata Group—were the country's largest software producers during the 1960s. As an outcome of the various policies of Jawaharlal Nehru (office: 15 August 1947 – 27 May 1964) the economically beleaguered country was able to build a large scientific workforce, third in numbers only to that of the United States of America and the Soviet Union. On 18 August 1951 the minister of education Maulana Abul Kalam Azad, inaugurated the Indian Institute of Technology at Kharagpur in West Bengal. Possibly modeled after the Massachusetts Institute of Technology these institutions were conceived by a 22 member committee of scholars and entrepreneurs under the chairmanship of N. R. Sarkar.

Relaxed immigration laws in the United States of America (1965) attracted a number of skilled Indian professionals aiming for research. By 1960 as many as 10,000 Indians were estimated to have settled in the US. By the 1980s a number of engineers from India were seeking employment in other countries. In response, the Indian companies realigned wages to retain their experienced staff. In the Encyclopedia of India, Kamdar (2006) reports on the role of Indian immigrants (1980 - early 1990s) in promoting technology-driven growth:

The United States’ technological lead was driven in no small part by the brain power of brilliant immigrants, many of whom came from India. The inestimable contributions of thousands of highly trained Indian migrants in every area of American scientific and technological achievement culminated with the information technology revolution most associated with California’s Silicon Valley in the 1980s and 1990s.[6]

The National Informatics Centre was established in March 1975. The inception of The Computer Maintenance Company (CMC) followed in October 1976. Between 1977-1980 the country's Information Technology companies Tata Infotech, Patni Computer Systems and Wipro had become visible. The 'microchip revolution' of the 1980s had convinced both Indira Gandhi and her successor Rajiv Gandhi that electronics and telecommunications were vital to India's growth and development. MTNL underwent technological improvements. Between 1986-1987, the Indian government embarked upon the creation of three wide-area computer networking schemes: INDONET (intended to serve the IBM mainframes in India), NICNET (the network for India's National Informatics Centre), and the academic research oriented Education and Research Network (ERNET).

Post liberalization

Regulated VSAT links became visible in 1985. 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 Indian economy underwent economic reforms in 1991, leading to a new era of globalization and international economic integration. Economic growth of over 6% annually was seen between 1993-2002. The economic reforms were driven in part by significant the internet usage in the country. The new administration under Atal Bihari Vajpayee—which placed the development of Information Technology among its top five priorities— 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 recommendations 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.

The New Telecommunications Policy, 1999 (NTP 1999) helped further liberalize India's telecommunications sector. The Information Technology Act 2000 created legal procedures for electronic transactions and e-commerce.

Throughout the 1990s, another wave of Indian professionals entered the United States. The number of Indian Americans reached 1.7 million by 2000. This immigration consisted largely of highly educated technologically proficient workers. 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. Thus GOI planned to establish new Institutes specially for Information Technology to enhance this field. In 1998 India got the first IT institute name Indian Institute of Information Technology at Gwalior. The success of Information Technology in India not only had economic repercussions but also had far-reaching political consequences. India's reputation both as a source and a destination for skilled workforce 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 further helped aid in promoting technology-driven growth.

Recent development

Infosys Media Centre in Electronic City, Bangalore.
Tidel Park—one of the largest software parks in Asia—was set up on the July 4, 2000 in Chennai, to aid the growth of Information Technology in Tamil Nadu.
Microsoft India Development Center, Hyderabad
Millenium Tower in Kolkata, Salt Lake Sector-5, a major IT hub in the city.
Patni Knowledge Park, Airoli, Navi Mumbai
Cognizant's Delivery Center in Pune

India is now one of the biggest IT capitals in the modern world.

The economic effect of the technologically inclined services sector in India—accounting for 40% of the country's GDP and 30% of export earnings as of 2006, while employing only 25% of its workforce—is summarized by Sharma (2006):

The share of IT (mainly software) in total exports increased from 1 percent in 1990 to 18 percent in 2001. IT-enabled services such as backoffice operations, remote maintenance, accounting, public call centers, medical transcription, insurance claims, and other bulk processing are rapidly expanding. Indian companies such as HCL, TCS, Wipro, and Infosys may yet become household names around the world.

Today, Bangalore is known as the Silicon Valley of India and contributes 33% of Indian IT Exports. India's second and third largest software companies are head-quartered in Bangalore, as are many of the global SEI-CMM Level 5 Companies.

Mumbai too has its share of IT companies that are India's first and largest, like TCS and well established like Reliance[disambiguation needed ], Patni, LnT Infotech, i-Flex, WNS, Shine, Naukri, Jobspert etc. are head-quartered in Mumbai. and these IT and dot com companies are ruling the roost of Mumbai's relatively high octane industry of Information Technology.

Such is the growth in investment and outsourcing, it was revealed that Cap Gemini will soon have more staff in India than it does in its home market of France with 21,000 personnel+ in India.[7]

On 25 June 2002 India and the European Union agreed to bilateral cooperation in the field of science and technology. A joint EU-India group of scholars was formed on 23 November 2001 to further promote joint research and development. India holds observer status at CERN while a joint India-EU Software Education and Development Center is due at Bangalore.

India's IT industry (USD bn)[8]
Particulars FY 2004 FY 2005 FY 2006 FY 2007 FY 2008
IT Services 10.4 13.5 17.8 23.5 31.0
- Exports 7.3 10.0 13.13 18.0 23.1
- Domestic 3.1 3.5 4.5 5.5 7.9
ITES-BPO 3.4 5.2 7.2 9.5 12.5
- Exports 3.1 4.6 6.3 8.4 10.9
- Domestic 0.3 0.6 0.9 1.1 1.6
Engineering services, R&D and Software products 2.9 3.9 5.3 6.5 8.6
- Exports 2.5 3.1 4.0 4.9 6.4
- Domestic 0.4 0.7 1.3 1.6 2.4
Hardware 5.0 5.9 7.0 8.5 12.0
- Exports 0.5 0.5 0.6 0.5 0.5
- Domestic 4.4 5.1 6.5 8.0 11.5
Total IT industry (including hardware) 21.6 28.4 37.4 48.0 64.

Top 10 IT Hubs in India

Ranking City Description
1 Bangalore Popularly known as the capital of the Silicon Valley of India is currently leading in Information Technology Industries in India.
2 Chennai It is the Second largest exporter of Software next to Bangalore. It has the largest operations for India's top software company TCS, Infosys ( has worlds largest development center with 25,000 employers in Mahindra world city at Maraimalainagar, and many centers in IT corridor), and other software companies like Wipro, CTS, Patni, L&T infotech and many companies have major operations in IT corridor, Ambattur and other places in Chennai
3 Hyderabad Hyderabad, called Cyberabad, which has good infrastructure and good government support is also a good technology base in India. The Government of AP has built a separate township for IT Industry called the HITEC City.[9]
4 Pune Pune, a major industrial point in India.
5 NCR The National Capital Region of India comprising Delhi, Noida, Greater Noida , Ghaziabad, Gurgaon, Faridabad and are having ambitious projects and are trying to do every possible thing for this purpose.
6 Mumbai Popularly known as the commercial, entertainment, financial capital of India, This is one city that has seen tremendous growth in IT and BPO industry, it recorded 63% growth in 2008.[10] TCS, Patni, LnT Infotech, I-Flex WNS and other companies are headquartered here.
7 ahmedabad ahmedabad is a major IT hub in western India. All major IT companies are present here. The city has tremendous potential for growth in this sector gandhinagar is also becoming an it hud].
8 Trivandrum Trivandrum, the capital of Kerala is a green metropolis and tier I city. GOK provides a good platform for IT development in the city with India's largest IT park Technopark and dedicated Technocity SEZs.
9 Bhubaneswar Bhubaneshwar largest city of Orissa exports more than 1500 crores.
10 Jaipur This rapidly growing industrial hub houses a lot of IT/ITES and BPO giants. Genpact, Connexions IT services, Deutsche Bank and EXL BPO, Infosys, Tech Mahindra, and Wipro are here. There are plans to build the largest IT SEZ in India by Mahindra under the Mahindra World City.

See also


Further reading

  • Alexander, 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.
  • 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.

External links

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