Trends of IT Industry in India
early days, since software development could not come to India, Indian
programmers were sent to developed countries. It began in 1974 when Tata
Consultancy Services (TCS) export programmers to US clients. Other firms
followed including foreign IT firms.
the exported programmers worked for global IT firms. Later in the decade, as
IBM grew itself in market shares, clients such as banks approach Indian firms
to implement migrations for existing applications software into IBM-compatible
versions. By 1980, there were 20 software development firms with annual exports
of nearly $4.5m.
market state remained hostile to the software industry through the mid-1970s.
Import tariffs were high (approximately 135% on hardware and 100% on software
packages) and software’s were not looked as an “industry”, so that exporters
were ineligible for bank finance. However, these protectionist policies favoured
established firms with conglomerate interests and access to finance over small
firms. Bombay (Mumbai), the country’s commercial capital, became the primary centre
of the business. 7 of the top 8 exporters in 1980 were headquartered in Bombay
with a 90% market share
protection results to labour exports, it slowed down the inflow of new skills
into country. The industry learned global skills mainly through programmers
returning from overseas projects and assignments, but this was further slowed
because most of them chose to remain overseas. For example, in 1986, 59.3% of top
IIT graduates in computer science and engineering (CS) migrated.
important, though very thin resource, was the return of U.S.-educated
engineers, who teaches advanced project management and engineering skills. In
summary, despite access to a large stack of programmers and engineers, the
industry’s value-addition measured by average revenue per employee remained very
low. The activity of the industry during its first decade consisted of little
other than recruitment of engineers.
a producer of IT, the government failed. Its protectionist policies were
intended to benefit SOEs and crowd out the private sector. Although the private
sector discovered a way out, the solution forced on domestic firms was to opt
for the lowest end of the business, one that reduced opportunities for
learning. It was not till the mid-1980s that redemptive policies, including
freer entry for TNCs, helped the sector. Education policy, moreover, has not
retrospect, origination needs bundling of the required skills from several local
First, the pioneering firms
chose work which needs simple managerial skills and low project finance: they
recruited software engineers and
programmers who were exported for short periods at a time to clients that
determined their use.
· Second, newly-trained
returnees provided advanced engineering and project management skills.
· Third, foreign IT firms,
that served Indian markets until the 1973 laws shut them down, became the first