Information technology in India
||This article may contain original research. (January 2012)|
The Information technology industry in India has gained a brand identity as a knowledge economy due to its IT and ITES sector. The IT–ITES industry has two major components: IT Services and business process outsourcing (BPO). The growth in the service sector in India has been led by the IT–ITES sector, contributing substantially to increase in GDP, employment, and exports. The sector has increased its contribution to India's GDP from 1.2% in FY1998 to 7.5% in FY2012. According to NASSCOM, the IT–BPO sector in India aggregated revenues of US$100 billion in FY2012, where export and domestic revenue stood at US$69.1 billion and US$31.7 billion respectively, growing by over 9%. The major cities that account for about nearly 90% of this sectors exports are Bangalore, Chennai, Delhi, Mumbai, Hyderabad, Pune, Kolkata and Coimbatore. Export dominate the IT–ITES industry, and constitute about 77% of the total industry revenue. Though the IT–ITES sector is export driven, the domestic market is also significant with a 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. According to Gartner, the "Top Five Indian IT Services Providers" are Tata Consultancy Services, Infosys, Cognizant, Wipro and HCL Technologies.
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. Generally dominant player in the global outsourcing sector. However, the sector continues to face challenges of competitiveness in the globalized 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. India's IT Services industry was born in Mumbai in 1967 with the establishment of Tata Group in partnership with Burroughs. 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.
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 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.|
The National Informatics Centre was established in March 1975. The inception of The Computer Maintenance Company (CMC) followed in October 1976. During 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. During 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 2012 . 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 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—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. 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
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 1n0 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.
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.
|Particulars||FY 2004||FY 2005||FY 2006||FY 2007||FY 2008|
|Engineering services, R&D and Software products||2.9||3.9||5.3||6.5||8.6|
|Total IT industry (including hardware)||21.6||28.4||37.4||48.0||64.|
 IT companies offices
Various large and small IT company offices across India.
Tidel Park in Chennai.
IBM India in Kolkata
BPO Building, Bangalore campus
Cognizant's Delivery Center in Pune
 Major IT Hubs
|1||Bangalore||Popularly known as the capital of the Silicon Valley of India is currently leading in Information Technology Industries in India. It leads the pack of outsourcing destinations in the world. Recently the city has become an international hub for software R&D as well.|
|2||Chennai||It is the second largest exporter of Software in India as listed by NeoIT. Chennai is a major center for TCS, Cognizant, HCL, L&T Infotech, Infosys and Wipro. Almost every major software company in India has a presence in Chennai.|
|3||Hyderabad||Hyderabad is the head-quarters of Microsoft India, Mahindra Satyam and one of the largest center for TCS, Wipro, CTS, HCL, ORACLE, Deloitte and many multi national companies . More than 25 major IT hubs are located near HITECH city, Gachibowli.|
|4||Delhi||Delhi, a major industrial point in India. It is also referred to as Education Hub of India. It was declared as Alpha-Global City recently. As one of the largest cities in India, and as a result of its many colleges and universities, Delhi is emerging as a prominent location for IT and manufacturing companies to expand.|
|5||Mumbai||Most foreign IT companies have offices here.|
 See also
- EKA (supercomputer)
- List of Software Companies in India
- List of Tech Parks in Chennai
- Category:Software companies of India
- Indian IT-BPO Industry
- Gartner Says Top Five Indian IT Services Providers Grew 23.8 Percent In 2011
- "Economic Times (2010), ''Are IT jobs losing sparkle?''". Economictimes.indiatimes.com. 27 August 2010. http://economictimes.indiatimes.com/news/news-by-industry/jobs/Are-IT-jobs-losing-sparkle/articleshow/6443498.cms. Retrieved 30 August 2010.
- "Special Economic Zones: Profits At Any Cost". Doccentre.net. http://www.doccentre.net/Tod/SEZs-Profits-At-Any-Cost.php. Retrieved 22 July 2010.
- "Top 50 Emerging Global Outsourcing Cities". www.itida.gov.eg. http://www.itida.gov.eg/Documents/Tholons_study.pdf. Retrieved 22 July 2010.
- Kamdar (2006)
- "/ Technology - Capgemini in India milestone". Ft.com. 1 November 2009. http://www.ft.com/cms/s/0/cca53ba8-c71b-11de-bb6f-00144feab49a.html?ftcamp=rss&nclick_check=1. Retrieved 22 July 2010.
- [dead link]
 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.