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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. More than 2.5 million people are employed in the sector either directly or indirectly, making it one of the biggest job creators in India and a mainstay of the national economy. In 2010-11, annual revenues from IT-BPO sector is estimated to have grown over US$76 billion compared to China with $35.76 billion and Philippines with $8.85 billion. [1] India's outsourcing industry is expected to increase to US$225 billion by 2020. The most prominent IT hub is IT capital Bangalore. The other emerging destinations are Chennai, Hyderabad, Trichy, Coimbatore, Kolkata, Pune, Mumbai, Ahmedabad, NCR and Kochi. 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]

Each year India produces roughly 500,000 engineers in the country, [5] [6] out of them only 25% to 30% possessed both technical competency and English language skills, although 12% of India's population can speak in English. [7] India developed a number of outsourcing companies specializing in customer support via Internet or telephone connections. By 2009, India also has a total of 37,160,000 telephone lines in use, [8] a total of 506,040,000 mobile phone connections, [9] a total of 81,000,000 Internet userscomprising 7.0% of the country's population, [10] and 7,570,000 people in the country have access to broadband Internetmaking it the 12th largest country in the world in terms of broadband Internet users. [11] Total fixed-line and wireless subscribers reached 543.20 million as of November, 2009. [12]

Formative years (till 1991)

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 Servicesestablished in SEEPZ, Mumbai [3] by the Tata Groupwere 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:

Information technology in India


The United Statestechnological 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 Californias Silicon Valley in the 1980s and 1990s. [13]

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).


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 clientsoffice.

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 Vajpayeewhich placed the development of Information Technology among its top five prioritiesformed 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

Information technology in India


established 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 technologyvalued in the western worldfacilitated the growth of an entrepreneurial class of immigrant Indians, which further helped aid in promoting technology-driven growth.


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

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

25% of its workforce — is summarized by Sharma (2006): Infosys Media Centre in Electronic City

Infosys Media Centre in Electronic City, Bangalore.

Infosys Media Centre in Electronic City , Bangalore. Millenium Tower in Kolkata , Salt Lake Sector-5,

Millenium Tower in Kolkata, Salt Lake Sector-5, a major IT hub in the city.

Kolkata , Salt Lake Sector-5, a major IT hub in the city. Tidel Park — one

Tidel Parkone of the largest software parks in Asiawas set up on the July 4, 2000 in Chennai, to aid the growth of Information Technology in Tamil Nadu.

Information technology in India


Information technology in India 4 Cyber Towers at Hitech City in Hyderbad Patni Knowledge Park, Airoli

Cyber Towers at Hitech City in Hyderbad

in India 4 Cyber Towers at Hitech City in Hyderbad Patni Knowledge Park, Airoli , Navi

Patni Knowledge Park, Airoli, Navi Mumbai

in Hyderbad Patni Knowledge Park, Airoli , Navi Mumbai Cognizant's Delivery Center in Pune The share

Cognizant's Delivery Center in Pune

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.

Next to Bangalore Hyderabad plays an important role in IT. Lot of companies were developed in Hyderabad, in the last few years.

And Mumbai too has its share of IT companies that are India's first and largest, like TCS and well established like Reliance, 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. [14]

Information technology in India


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) [15]


FY 2004

FY 2005

FY 2006

FY 2007

FY 2008

IT Services






- Exports






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Engineering services, R&D and Software products






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Total IT industry (including hardware)






Health issues among Young labor force

Employees in IT / ITES services undergo high stress in their work environment which raise serious concernsto work in this industry. [16] The corporate HR practices are another concern where one survey found TCS employees average age is 29 years and the recruitment practices which contribute to the inexperienced work force in the industry. [17] Corporate critics shortage of human resources but the analyst says 20 year old industry cannot have 6 year experienced labor force. [18] There have been raising concerns on violating employment laws by corporates and there are harassment reported from companies like Wipro. [19]

Top Nine IT Hubs in India





Popularly known as the capital of the Silicon Valley of India is currently leading in Information Technology Industries in India.


Famously known as "Gateway of South India", it is the second largest exporter of Software. [20]


Hyderabad which has good infrastructure and good government support is also a good technology base in India.



The National Capital Region of India comprising Delhi, Gurgaon, Faridabad, Noida, Greater Noida and Ghaziabad are having ambitious projects and are trying to do every possible thing for this purpose.


Pune, a major industrial point in India.

Information technology in India



Kolkata is a major IT hub in eastern India. All major IT companies are present here. The city has tremendous potential for growth in this sector with upcoming areas like Rajarhat.


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. [21] TCS, Patni, LnT Infotech, I-Flex WNS and other companies are headquartered here.


This rapidly growing industrial hub houses a lot of IT/ITES and BPO giants. Genpact, Connexions IT services, Deutsche Bank and EXL BPO, Infosyss, Tech Mahindra, and Wipro are here. There are plans to build the largest IT SEZ in India by Mahindra under the Mahindra World City.


Fastest growing center of IT/IT-enabled services, BPO & KPO.


Retrieved 2010-08-30.

[3] "Special Economic Zones: Profits At Any Cost" (http://www.doccentre.net/Tod/SEZs-Profits-At-Any-Cost.php). Retrieved 2010-07-22. [4] "Top 50 Emerging Global Outsourcing Cities" (http://www.itida.gov.eg/Documents/Tholons_study.pdf).


[5] "India :: World's Second Largest English Speaking Country" (http://www.newsweek.com/id/32285). The Mythical




[6] "Engineers produced in India, China: It's the QUALITY, stupid!" (http://www.edn.com/blog/970000297/post/300013030.html). The


Retrieved 2009-08-31.

[7] "India :: World's Second Largest English Speaking Country" (http://tesol-india.ac.in/EnglishTeachingIndustry/en/

Retrieved 2009-08-31.

[8] CIA World Factbook: Rank Order - Telephones - main lines in use. (https://www.cia.gov/library/publications/the-world-factbook/

[9] CIA World Factbook: Rank Order - Telephones - mobile cellular. (https://www.cia.gov/library/publications/the-world-factbook/

[12] Tripathy, Devidutta (2008-07-25). "Reuters (2008), ''India adds 8.94 mln mobile users in June''" (http://uk.reuters.com/article/

Retrieved 2010-08-30.

[13] Kamdar (2006)

Retrieved 2010-07-22.

general200910157557). Globalservicesmedia.com.

Retrieved 2010-07-22.

Information technology in India


Further reading

• Alexander, Steve, E-Commerce. (2006: from Computers and Information Systems), Encyclopædia Britannica


• 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. 269273, 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. 236239, Thomson Gale, ISBN 0-684-31351-0.

• Kapur, Devesh (2006), "Diaspora" in Encyclopedia of India (vol. 1) edited by Stanley Wolpert, pp. 328331, 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. 4851, Thomson Gale, ISBN 0-684-31351-0.

• Nanda, B. R. (2006), "Nehru, Jawaharlal", Encyclopedia of India (vol. 3) edited by Stanley Wolpert, pp. 222227, Thomson Gale, ISBN 0-684-31352-9.

• Rothermund, Dietmar (2006), "Andhra Pradesh", Encyclopedia of India (vol. 1) edited by Stanley Wolpert, pp. 4344, 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. 331336, Thomson Gale, ISBN 0-684-31350-2.

• Sharma, Shalendra D. (2006), "Globalization", Encyclopedia of India (vol. 2) edited by Stanley Wolpert, pp. 146149, Thomson Gale, ISBN 0-684-31351-0

• Vrat, Prem (2006), "Indian Institutes of Technology", Encyclopedia of India (vol. 2) edited by Stanley Wolpert, pp. 229231, 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? (http://mosaic.unomaha.edu/India_2003.pdf), Communications of the Association for Information Systems, 11: 560-646.

External links

• C-Change: India CIO Forum (http://www.ciol.com/cchange/), Annual Conference for Top 100 CIOs of India.

India's Top IT Companies 2007 (http://www.dnb.co.in/TopIT/overview.asp), D&B Industry Research Service.

• Kanellos, Michael (2005), India's renaissance (http://news.cnet.com/Indias-renaissance-An-oral-history/ 2009-1041_3-5757756.html), CNET News.com.

Indias Information Technology Industry (http://www.indianembassy.org/indiainfo/india_it.htm), Indian Embassy to the United States of America, Government of India.

• India technology news (http://www.thinkdigit.com/)

Database of small-medium IT companies in India (http://www.indianITcompanies.com/resources.html), Precision Consultants

• Computer caste (http://www.wimklerkx.nl/EN/PROJECTS/IT.html) Photo documentary on social aspects of IT revolution in India. By photographer Wim Klerkx, 2001/2002.

Article Sources and Contributors


Article Sources and Contributors

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