Indian Software Industry

With the growth of computer industry in India , India is now emerging as an important destination for global business. The growth of computer industry in India has led to the growth of software industry, the hardware industry and the internet in India. GOI has accepted the fact that to meet the expanding demands of India's 900 million population, intensive computerization is not only inevitable but imperative.

Service sectors in the Indian economy have resorted to computerization on a large scale to ensure availability of consistent information at the right time. Of late, both the GOI and private sector have emerged as major end-users of computer systems and software. At the present rate of growth, the country which had only 100 computers before 1970 will have over five million computers before the turn of the century.

Indian Software Industry is one of the fastest sectors of the Indian economy employing about 2.50 lakh workers mostly from the highly skilled and educated segments. During the financial year 19998-99 (March-Feb) the Indian software industry was worth about 159 billion Indian Rupees (3.85 billion $ US) and exports accounted for nearly 70% of this at 2.69 billion USD. In 1999 - 2000 the Indian software industry is expected to gross over 5.65 billion USD representing the growth of nearly 50%.


Though India was an early convert to computers with the Indian Government and the industry using mainframes and data entry machines as early as the 50s/60s the Indian Software Industry took off only since the mid 1980's. An idea of its phenomenal growth can be had from the fact that the total industry output increased from Indian Rupees 500 million in 1988-89 to 1,59,000 million in 1998-99.


The Indian Software Industry is dominated (upto 70% by value) by exports and during the first decade of its evolution exports were wholly comprised of onsite staffing services at clients location overseas(also known as professional services or body shopping). From this lower end of the value chain the industry has steadily worked its way up and during 98-99 upto 40% of the exports were by way of offshore services or packaged products.


The gross revenues for the industry however do not fully reveal its potential to carry out software development work of outstanding quality. For example several top notch global IT majors like Microsoft, Motorola, Oracle, Cisco, Texas Instruments, Alcatel and others are working on their next generation products in their Indian labs. Similarly out of about one dozen software labs across the world rated at level 5(the highest) of SEI-CMM standards 5 are in India with nearly 10 or so at level 4. More than 200 of Fortune 1000 companies out source software of significant values from India for their core operations