The tech & IT industry in India is a booming $181 billion business with a share of 45% of the total exports and 7.7% of the GDP, and a global sourcing market. It constitutes 75% of the world’s total digital workforce and is a hub for various global companies to outsource. But on the flip side, it is struggling to maintain its position and relevance in the industry, with countries like Vietnam and Bangladesh coming into the competition. Let us take a look at how the industry blossomed and how it presently operates.
THE HISTORY OF TECH & IT IN INDIA: The tech & IT industry in India was born with the establishment of the Tata Group in partnership with Burroughs. The first software export zone, SEEPZ – the precursor to the modern-day IT park – was established in Mumbai in 1973. The economy then went through a major change with the reforms coming in 1991, and the economy shifting to an open market. According to an article in the Times of India, India’s liberalization was possible due to its IT industry. The government at that time made the development of it a priority and the National Task Force on Information Technology and Software Development was set up. “The New Telecommunications Policy, 1999” (NTP 1999) helped further liberalise India’s telecommunications sector. The Information Technology Act, 2000 created legal procedures for electronic transactions and e-commerce. A joint EU-India group of scholars was formed on 23 November 2001 to further promote joint research and development.
With experience in dealing with complex IT systems and confidence in working with international customers, several companies became multinationals with offices and centres across countries. They offered a wider range of services like executing large and complex projects involving integration, complete end-to-end solutions including management of IT infrastructure, running the services, providing IT strategy, and other related services.
To date, 1,250 companies from around the world have set up their own centres in India across almost all key industry verticals. Enterprises across industries such as banking, retail, and healthcare also started driving digital engineering work from their India development centres.
PRESENT DAY TECH & IT INDUSTRY: India is one of the largest markets for tech & IT in the world. With the largest young population and tons of skilled and unskilled labour available, it attracts various MNCs and global corporations for setting up of the tech & IT industry and also outsourcing labour. The industry’s share of total Indian exports (merchandise plus services) increased from less than 4% in FY1998 to about 25% in FY2012. The technologically-inclined services sector in India accounts for 40% of the country’s GDP and 30% of export earnings as of 2006, while employing only 25% of its workforce.
India is emerging as a “Digital Skills” hub. The country spends $1.6 billion annually to train the workforce in the sector. It’s the largest employer in the private sector with 3.9 million being employed. India is transforming into a digital economy with over 450 million-plus internet subscribers, only next to China. A lot of this can also be attributed to Reliance Jio whose attempt to pride mobile data at dirt cheap prices has resulted in spreading the internet to a vast majority of the population.
The tech & IT industry is one which has not limited itself to software development alone. Technology has been applied in train stations, hospitals, banks and many other places through database management systems, or through custom-made software. Most of the work that was done by hands earlier has been replaced with computers and laptops.
Smartphones and the internet are other arenas that revolutionised the way people lived in India. Both of these inventions are unarguably beneficial to all economies, but for a country like India where poverty and hunger are major issues, its impact was unexpected.
Government policies like “Make in India”, “Skill India” and “Digital India” have provided an avenue for the growth of the industry and many more companies and start-ups have started coming up. India is also the second-largest hub for tech start-ups. Cities like Bangalore and Noida are called the Silicon Valley of India.
The tech & IT services sector is witnessing one of its most turbulent times. With the advent of new technology paradigms like robotics, AI, blockchain, IoT and autonomous, it is changing how companies and individuals consume technology. Old, legacy technologies are getting replaced or eliminated and the emergence of cloud as an alternate computing model is gaining traction in the large and small enterprise segment. The need for talent reskilling is becoming imperative as businesses and the market realities change.
WHAT’S NEXT?: For long India has been a place to outsource services and never really the hub of innovation. In the coming years, the country should look at developing new technologies and using its workforce to the maximum capacity. According to an Economic Times article, India does have the potential to start developing technology instead of outsourcing services, and can actually compete with developers in Japan and China.
Start-up is the unicorn industry in India, who has risen to the occasion and many have converted themselves to multi-million-dollar business. Companies like Zomato, Ola and Byjus are popular companies that began as start-ups. As these companies expand, they’ll create a domino effect on their service providers which will lead to a growth in the industry.
Encouraging more foreign investment, offering tailored training programmes, trying to retain home-grown talent, as well as creating the right regulatory infrastructure are all vital to successful digital growth. India does have a long road to take to bloom into one of the best and the largest tech & IT industries in the world, but with the right environment for growth, intent and the tools necessary for development, it isn’t that hard to achieve.
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An aspiring civil servant, a curious mind but also an avid binge watcher- Prerna is currently pursuing BA Prog in English and Political Science from Kirori Mal College. She belongs to Chandigarh but really enjoys the hustle of Delhi. Her favourite pastime is taking naps and recognises herself as a pro at it.