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Information technology in India

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Title: Information technology in India  
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Subject: Economy of India, Economy of Telangana, Science and technology in India, Media of India, India
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Information technology in India

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.[1] According to NASSCOM, the sector aggregated revenues of US$100 billion in 2012, where export and domestic revenue stood at US$69.1 billion and US$31.7 billion respectively, growing by over 9%.[1]

The major cities that account for about nearly 90% of the sector's exports are Bangalore, Hyderabad, Kolkata, Chennai , Trivandrum, Noida, Mumbai and Pune. Bangalore is considered to be the Silicon Valley of India because it is the leading IT exporter.[3][4] Exports dominate the industry and constitute about 77% of the total industry revenue. However, the domestic market is also significant with a robust revenue growth.[1] The industry’s share of total Indian exports (merchandise plus services) increased from less than 4% in FY1998 to about 25% in FY2012. According to Gartner, the "Top Five Indian IT Services Providers" are Tata Consultancy Services, Infosys, Cognizant, Wipro , and HCL Technologies.[5]

Regulated VSAT links became visible in 1994.[6] Desai (2006) describes the steps taken to relax regulations on linking in 1991:

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 during 1993-2002. The economic reforms were driven in part by significant the internet usage in the country. The new administration under Atal Bihari Vajpayee 1999 govt pm—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:

"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. 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 1
  • Major IT Hubs 2
  • Employment 3
  • Future Outlook 4
    • The Indian Advantage 4.1
    • From Services to Product Orientation 4.2
    • Research and Development- The new drivers 4.3
  • See also 5
  • References 6
  • Further reading 7
  • External links 8

Recent development

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): "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 headquartered in Bangalore, as are many of the global SEI-CMM Level 100 Companies." Numerous IT companies are based in Mumbai, such as TCS (among India's first and largest), Reliance, Patni, LnT Infotech, Myzornis Corporation and i-Flex.

Thiruvananthapuram (Trivandrum), the capital of Kerala state, is the foremost among the Tier II cities that is rapidly growing in terms of IT infrastructure. As the software hub of Kerala, more than 80% of the state's software exports are from here.[7] 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—the project is worth INR10 billion and will have a capacity of 10,000 seats. The completion of the facility is expected in 2014 or 2015.[8]

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 will be located in Bangalore.[9]

Major IT Hubs

Rank Description
1 Bangalore Popularly known as the Silicon Valley of India and IT Capital of India. Bangalore is considered to be a global information technology hub and largest software exports from India. The top Indian IT service providers like Infosys and Wipro are headquartered in Bangalore, It is also country headquarters to many top firms like Intel, Texas Instruments, Bosch, Continental and many more, Bangalore alone consists of more than 35 percentage of all the IT companies present in India and contains close to 5000 companies making it the largest IT contributor in India.
2 Chennai Chennai is the Second largest exporter of IT and ITES of India. Almost all companies have their backup operations in Chennai. Cognizant,TCS, wipro,Infosys,Verizon,L&T,HCL,POLARIS, PATNI, CAPGEMINI and all the major global IT service company has its Indian operations' office's in Chennai and Major BPO'S and ITES.It has world class IT infrastructure like Mahindra World City, Tidel Park, IT Corridor.
3 Hyderabad Hyderabad is the major IT hub in India. It has become the first destination for the Microsoft development centre in India and largest software development centre outside of their headquarters in Redmond, Washington. It is also known as Cyber city which consists of many Multinational corporation companies such as Cognizant, TCS, Infosys, Syntel, Wipro etc., together called Hitech City. and is the BPO hub of India
4 Delhi The National Capital Region comprising Delhi, Gurgaon and Noida are clusters of software development.
5 Mumbai The Financial capital of India, but many IT companies like TCS which is India's first and largest have headquarters in Mumbai along with Reliance, Patni, LnT Infotech, Melstar Information Technologies, Mastek, Syntel and i-Flex.
6 Pune Major Indian and International Firms present in Pune. Pune is also C-DAC headquarters.
7 Kolkata The city is a major back-end operational hub for IBM, Deloitte.
8 Coimbatore Proudly called as "Manchester of South India", Coimbatore is one of the fastest emerging IT hub and developing cities of India. Coimbatore has major IT companies like Cognizant, Wipro, Robert Bosch, HCL Technologies, DELL, Exterro, Tata Consultancy Services. It also hosts the training center of Cognizant. There are many other IT majors which have planned to start the operations soon.
9 Bhubaneswar The capital city of Odisha, an emerging IT and education hub, is one of India's fastest developing cities.
10 Thiruvananthapuram The capital of Kerala, now houses all major IT companies including Oracle, TCS, Infosys, and contributes in IT export of India.
11 Kochi The commercial capital of Kerala, now houses all major IT companies including TCS, Cognizant, and contributes in IT export of India.


This sector has also led to massive employment generation. The industry continues to be a net employment generator - expected to add 230,000 jobs in FY2012, thus providing direct employment to about 2.8 million, and indirectly employing 8.9 million people.[1] Generally dominant player in the global outsourcing sector. However, the sector continues to face challenges of competitiveness in the globalized 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 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.[10] India's IT Services industry was born in Mumbai in 1967 with the establishment of Tata Group in partnership with Burroughs.[11] 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 1980s.[12]

Future Outlook[13]

The Indian IT market currently focuses on providing low cost solution in the services business of global IT. Presence of Indian companies in the product development business of global IT is very meagre, however, this number is slowly on the raise. US giants that outsource work to India, do not allocate 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, IT jobs, that were earlier confined to Bangalore, are slowly starting to experience a geographical diffuse into other cities like Chennai, Hyderabad and Pune. The growth is not fast paced, this, can be largely attributed to the lethargic attitude of the government in providing proper telecommunication infrastructure. The penetration levels are higher for mobile, but, the speed at which the backbone infrastructure works (network speed) and the coverage it offers are far below what other countries of the world have currently in offer.

The Indian Advantage

The above listed views might possibly work against India’s’ dream to become the biggest contributor to world IT business, but, if there is one factor that is particular only to India, and, the one that can nullify all negative factors lined up against it, would be, the volume of young, English speaking talent pool that India has got to offer. This number far exceeds, any other country can generate in the coming years. It cannot be denied that China is gearing up to reduce the English fluency gap, but, at the same time, doing it with ease like India, is a topic of discussion.

From Services to Product Orientation

The migration of Indian IT companies to mainstream product development is not happening any time in the near future, this, primarily can be attributed to the fact that was discussed in earlier section, which is, lack of innovation culture amongst the top hierarchy of the firm, and, less availability of skilled management graduates in the country. However, what might possibly happen is, global multinationals that are currently outsourcing services and back office jobs to India, might outsource more of higher level jobs in SDLC (Software Development Life Cycle) like requirement analysis and architecture design. The other opportunity is, Indian subsidiaries of global multinationals might take up significant chunk of the product development than what they are currently doing, this, however, is not happening currently because, the global IT firms are still not comfortable in working out a way to extract high end work from Indian companies.

Research and Development- The new drivers

The research in the industry was earlier concentrated towards programming technologies like Java, in the recent times, the research focus changed towards technologies like mobile computing, cloud computing and software as a service. This shift is attributed to preference of clients towards the ubiquitous computing over standalone computing and the growing demand for low cost computing solutions.

See also


  1. ^ a b c d "Indian IT-BPO Industry".  
  2. ^ Kamdar (2006)
  3. ^ Canton, Naomi. "How the 'Silicon Valley of India' is bridging the digital divide". CNN. Retrieved December 6, 2012. 
  4. ^ RAI, SARITHA. "Is the Next Silicon Valley Taking Root in Bangalore?". New York Times. Retrieved March 20, 2006. 
  5. ^ "Gartner Says Top six Indian IT Services Providers Grew 23.8 Percent In 2011". 2012-05-07. Retrieved 2013-09-28. 
  6. ^ "Online Journal of Space Communication". Retrieved 2013-09-28. 
  7. ^ "80% of IT exports in Kerla". 
  8. ^ "TCS to build a 10,000 seat learning campus in Kerala" (Press release). TATA Consultancy Services. TATA Consultancy Services. 14 September 2010. Retrieved 10 November 2013. 
  9. ^ Inc, lbp (2013). India Telecom Laws and Regulations Handbook. Int'l Business Publication. p. 300.  
  10. ^ "Are IT jobs losing sparkle?"Economic Times (2010), . 27 August 2010. Retrieved 30 August 2010. 
  11. ^ "Special Economic Zones: Profits At Any Cost". Retrieved 22 July 2010. 
  12. ^ "Top 50 Emerging Global Outsourcing Cities". Retrieved 22 July 2010. 
  13. ^ 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). 

Further reading

  • 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.

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External links

  • Home Page | NASSCOM
  • NASSCOM Foundation
  • Softsense
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