Information technology in India

Based on Wikipedia: Information technology in India

The Country That Codes the World

Here's a number that might startle you: if you work for a large corporation anywhere in the Western world, there's roughly a two-in-three chance that some piece of software you use daily was written, maintained, or supported by someone in India. The country handles sixty-five percent of all global information technology offshore work and forty percent of all business process outsourcing.

This isn't a recent development. It's the culmination of a deliberate, decades-long strategy that transformed a newly independent nation grappling with poverty into the world's largest exporter of information technology services.

The story begins, unexpectedly, in Mumbai in 1967.

From Bhabha to Bangalore

The foundations were laid by something called the Electronics Committee—better known as the Bhabha Committee—which in 1966 drafted a ten-year plan for India's technology future. At the time, this might have seemed wildly optimistic. India had only gained independence from Britain nineteen years earlier. The country was still predominantly agricultural, with widespread illiteracy and limited infrastructure.

But the committee saw something others missed. India had two enormous advantages: a massive English-speaking population (a legacy of British colonialism that would prove unexpectedly valuable) and a cultural emphasis on education, particularly in mathematics and engineering.

The first concrete step came in 1967 when Tata Consultancy Services opened its doors in Mumbai. A decade later, they partnered with Burroughs Corporation—a major American computer company—and began exporting software services abroad. This was India's first taste of what would become its signature industry.

In 1973, Mumbai established something called SEEPZ—the Santa Cruz Electronics Export Processing Zone. Think of it as the grandfather of every modern tech park you've ever seen. By the 1980s, this single zone was responsible for more than eighty percent of India's entire software exports.

Eighty percent from one location. That's how small the industry was. And how concentrated.

Breaking the Monopoly

The early growth faced a peculiar obstacle: communication. To do offshore software work, Indian companies needed reliable data links to their American and European clients. But in 1991, only the government could legally operate satellite communication links. Private companies couldn't beam their work directly overseas.

The solution was clever, if bureaucratically absurd. The government created a corporation called Software Technology Parks of India, or STPI. Because it was government-owned, it could legally operate satellite links without breaking the state monopoly. STPI set up technology parks in different cities, each with shared satellite connections that private firms could use.

It worked. By 1993, the government began allowing individual companies their own dedicated links. Indian programmers could now transmit their work directly to clients in New York or London as easily as if they were working in the next building.

This might seem like a minor technical detail, but it was transformative. Indian firms quickly proved to their American customers that a satellite link was just as reliable as having a team of programmers physically present in the client's office—and significantly cheaper.

The Task Force That Changed Everything

The real acceleration came in the late 1990s. The Indian government formed a National Task Force on Information Technology, and what happened next is a case study in how consensus can spark rapid change.

Within ninety days—a blink of an eye in government time—the Task Force produced an extensive report and an action plan with one hundred and eight specific recommendations. How did they move so fast?

Because they weren't inventing from scratch. They were synthesizing frustrations and ideas that had been building for years across state governments, universities, and the software industry itself. They incorporated lessons from Singapore's tech success and recommendations from international bodies like the World Trade Organization and the World Bank. The consensus already existed within India's technology community. The Task Force simply gave it an official voice and a path to implementation.

The Numbers Tell the Story

Let's pause and consider the scale of what happened next.

In 1998, information technology contributed just 1.2 percent of India's entire economic output. By 2019, that figure had risen to seven percent. In fiscal year 2024, the industry generated an estimated two hundred fifty-four billion dollars in revenue.

To put that in perspective: India's IT sector alone produces more economic value than the entire economies of Portugal, New Zealand, or Vietnam.

The industry now employs 5.4 million people directly. That's roughly the population of Ireland, or about twice the population of Chicago. And these are formal sector jobs in a country where much of the economy remains informal.

Exports dominate. About seventy-nine percent of the industry's revenue comes from selling services abroad. When you call technical support for your American bank, there's a good chance you're talking to someone in Bangalore or Hyderabad. When a British retailer needs a new inventory system, Indian programmers likely built it.

The Silicon Valleys of the Subcontinent

The industry didn't spread evenly across India. It concentrated in a handful of cities that became globally recognized tech hubs.

Bangalore—officially Bengaluru—is the undisputed capital. Indians call it the "Silicon Valley of India," and the comparison isn't hyperbole. As of 2017, the city accounted for thirty-eight percent of all India's IT exports, worth forty-five billion dollars. It employs roughly one million people directly in technology, with another three million in supporting roles. The city is also home to forty-four percent of India's unicorn startups—private companies valued at over a billion dollars.

Hyderabad comes second, anchored by an area literally called "Cyberabad" or HITEC City. It's also India's largest bioinformatics hub, combining traditional IT with the growing field of computational biology.

Chennai holds third place, home to TIDEL Park, which was Asia's largest IT park when it was built. Then comes Pune, which has attracted major global companies and seen homegrown startups like Druva and FirstCry achieve international recognition.

Even Kolkata, long considered an industrial rather than technology center, has emerged as East India's major IT hub. Salt Lake Electronics Complex, established in the city's Salt Lake Sector V, was India's first fully integrated electronics complex. The city now employs over two hundred thousand people in technology.

The Giants

Five companies dominate Indian IT services, and their names are worth knowing because you've almost certainly used their work, even if you've never heard of them.

Tata Consultancy Services, or TCS, is the largest. In September 2021, it became the first Indian IT company to reach a market capitalization of two hundred billion dollars. To contextualize that: TCS is worth more than IBM, Oracle, or SAP.

Infosys comes second. Founded in 1981 with just two hundred fifty dollars in capital, it became the fourth Indian company ever to reach a hundred billion dollar market cap in August 2021.

Then there's Wipro, Tech Mahindra, and HCL Technologies. Together, these five companies represent the bulk of Indian IT services revenue and employ millions of workers.

The Shadow Side: Attrition, Anxiety, and Automation

But the Indian IT industry has a problem. Actually, it has several.

The most visible is employee attrition. Indian IT companies have the highest turnover rates in the industry globally. People don't stay. They jump between companies constantly, chasing marginally better salaries or slightly improved working conditions. In recent years, the industry has seen a surge in resignations at all levels.

Why? The reasons are depressingly universal: lack of career growth opportunities, poor work-life balance, high stress, and limited skill development. The competitive job market means there's always another company offering a bit more money. So people leave.

This churn has real costs. Companies spend enormous sums recruiting and training replacements. Institutional knowledge walks out the door. Projects get delayed. Client relationships suffer when their point of contact changes every few months.

Companies are trying to address this with flexible work arrangements, better training programs, and improved compensation. But the fundamental economics work against them. India's IT industry built its success on cheaper labor. That same dynamic makes it difficult to pay the wages that might keep workers from jumping ship.

The Automation Threat

Here's the deeper existential challenge: the very efficiency that made Indian IT outsourcing attractive might make it obsolete.

Artificial intelligence is getting better at coding. Tools like GitHub Copilot, ChatGPT, and Google's Gemini can now write functional code from simple descriptions. They can debug programs. They can answer technical questions that once required a human support agent.

The implications for India are stark. According to researchers at the University of Pennsylvania's Center for the Advanced Study of India, sixty-nine percent of formal employment in India could be automated by 2030. One analysis suggests that 640,000 low-skilled IT service jobs are at risk, while only 160,000 new mid-to-high-skilled positions will be created to replace them.

Goldman Sachs predicts that artificial intelligence could automate the equivalent of three hundred million full-time jobs globally. A significant portion of those jobs are in precisely the outsourcing and business process work where India dominates.

The 2024 tech layoffs weren't just about economic downturns. Google, Amazon, Meta, and Cisco all announced significant job cuts. Vineet Nayar, former CEO of HCL Technologies—one of those top five Indian IT firms—said plainly that skills like coding, testing, maintenance, and responding to trouble tickets "will be taken over by AI" and "will become obsolete."

This is the paradox of Indian IT: the industry grew by providing skilled workers more cheaply than Western countries could. But AI doesn't need a salary at all.

The Darker Underbelly

No honest account of Indian IT can ignore two troubling phenomena: credential fraud and technical support scams.

The first is an open secret within the industry. Many IT workers use forged experience certificates to gain employment. Consultancies, mainly operating out of Hyderabad and Bangalore, provide fake documents claiming years of experience that candidates never actually had. Some use "proxy interviews" where a more qualified person takes the technical assessment while the actual candidate later shows up for work.

This isn't harmless resume padding. It damages the reputation of legitimate Indian IT companies. It creates security risks when unqualified personnel access sensitive systems. And it reflects the intense pressure within the industry—the desperation for jobs and the premium placed on specific experience credentials.

The second issue is more straightforward fraud. Technical support scams—where callers pretend to be from Microsoft or Apple, convince victims their computer is infected, and charge hundreds or thousands of dollars for fake repairs—are disproportionately traced to India. A 2017 academic study found that eighty-five percent of tech support scams that could be geolocated originated from Indian locations, primarily Kolkata, Bangalore, Hyderabad, and Mumbai.

These scams cause real harm. Victims lose money, sometimes their life savings. They suffer identity theft. They experience genuine emotional distress. Law enforcement in both India and Western countries is working to address this, but the scams continue.

What Comes Next

The Indian IT industry faces a pivotal moment. It grew by being cheaper. It scaled by being reliable. But the automation wave doesn't care about labor costs, and reliability is table stakes in a world where AI can generate functional code in seconds.

The industry association NASSCOM has set an ambitious target: three hundred fifty billion dollars in revenue by fiscal year 2026, growing at eleven to fourteen percent annually. Whether they hit that target depends on something harder to measure than revenue: whether Indian IT can move up the value chain from executing tasks to designing solutions.

The transformation won't be painless. Hundreds of thousands of lower-skilled workers may find their jobs automated. The companies that thrive will be those that retrain their workforce for higher-value work—architecture, strategy, complex problem-solving—that AI can't yet do well.

It's worth remembering that India has reinvented itself before. A country that was primarily agricultural sixty years ago became a software superpower through deliberate policy, educational investment, and entrepreneurial drive. The Bhabha Committee couldn't have imagined TCS reaching a two hundred billion dollar market cap. The programmers at SEEPZ in the 1980s couldn't have foreseen Bangalore becoming a global tech hub rivaling San Francisco.

The next chapter is unwritten. But if history is any guide, writing off India's ability to adapt would be a mistake.