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The Past, Present and Future the IT Industry in India

The Past, Present and Future the IT Industry in India

You look at marketing: everything that’s happening in marketing is digitized. Everything that’s happening in finance is digitized. So pretty much every industry, every function in every industry, has a huge element that’s driven by information technology. It’s no longer discrete.

Satya Nadella
Chief Executive Officer of Microsoft

Citing the quote above, it can be said that the Information Technology (IT) industry is growing by leap and bounds, unlike any other, and India is not far behind. Consisting of two major components, namely hardware and software development, the IT industry is one of the largest private-sector employers in India.  The industry has come a long way from facing a hostile economy to being one of the favourite destinations for IT-enabled services by overseas clients and a major contributor towards India’s GDP.

There is a lot that we do not know about the rich history of the IT industry in India, as well as its present scenario, and future predictions. This article attempts to cover all the aspects of the industry, with intricate details, starting from its birth, further shedding light on its progress till the present day and beyond.

A Brief History of the Indian IT and Software Industry

Let us break down each era in the history of the IT industry hierarchically so that we can have a better understanding of the events until the present time.

The 1960s

The Indian IT industry started its journey in 1968. This was when Tata Consultancy Services (TCS) was formed. TATA formed TCS for providing software development services, for the Burroughs Corporation, United States. During this time there were no local markets and the government policies were not friendly towards private enterprises making it hard for IT industries to survive.

The 1970s

The government policies remained hostile and the economy was controlled by the state. At this time, bank finance was not available for exporters and important tariff rates for software and hardware were hiked to over 100% and 135% respectively. It was also during this time when the first software export zone, Santacruz Electronics Export Processing Zone (SEEPZ), the forefather of all IT parks of the recent times,  was established in Mumbai

The 1980s

This was the year when Rajiv Gandhi became Prime Minister, and government policies changed for the IT sector. The import tariffs for hardware and software decreased to 60% as per the New Computer Policy (NCP 1984). Over 80% of India’s software exports were from SEEPZ during this time.

The 1990s

This was the era when the Indian economy underwent major reforms, especially under the administration of  Sri Atal Bihari Vajpayee (1998-2004), who appointed the development of Information Technology among the Indian economy’s top five priorities. He also established the Indian National Task Force on Information Technology and Software Development. The Department of Electronics created the Software Technology Parks of India (STPI) in different cities, owned by the government, which could provide VSAT communications without breaching its monopoly.  

In the year 1993, the government started allowing companies to have their own dedicated links. This step encouraged companies to communicate their work directly abroad.

Regulated VSAT links became visible in 1994.

The 2000s

Legal procedures were created by the Information Technology Act, 2000 for electronic transactions and e-commerce during this time. Between the years of 1999-2000, the Indian IT industry grew over $5.7 billion, with a steady annual growth of 50% since 1991.

Where does the Indian IT Industry stand today?

India is home to some of the biggest and finest IT and software industries like International Business Machines Corporation(IBM), Tata Consultancy Services (TCS), Wipro, and Hewlett Packard (HP) to name a few. In fact, the country consists of over 75% of the global talent within the IT industry and it accounts for over 67% of the global outsourcing market.  Furthermore, the Indian IT & ITeS companies have set up over 1,000 global delivery centres in over 80 countries across the world.

The data of progress of the IT industry in India up to the present time, along with all its core competencies and strengths, is huge and commendable, thus attracting significant investments from major countries globally. We can safely say that the Indian IT industry has successfully accrued important brand equity in the global market.

According to the National Association of Software and Services Companies (NASSCOM), IT exports from India will exceed US$330 billion by 2019-20. This accounts for nearly 14% of the projected worldwide spend if India maintains its current share of the global offshore IT market.

At present, the Digital India campaign run by the government is investing over $20 billion to improve the infrastructure of the internet in the country as well as to promote online payments and e-governance. On the other hand, the Startup India campaign supports technology startups, which are the critical components for the growth and development of the IT industry.

The future potential

The Indian IT industry is riding on the wave of the fourth industrial revolution, also known as Industry 4.0. This means that a great transformation is on the way for this sector. Upcoming digital businesses and their fundamental technology platforms will require support via a robust digital network, which will have a focus on the endpoints of the people involved.

Subjected to new trends, the Indian IT industry will witness an incredible amount of untapped potential, which will not only relate to technological trends of the present time. Simplicity, in terms of a user interface, for consumer benefits, should be the key focus for players in the IT industry. The reason why this will work is that with everything moving at breakneck speed, time is limited and consumers won’t have the time to learn how to use a product.

With new technologies evolving, cybersecurity is going to be a major cause of concern for businesses and an IT company is only as good as the services it can provide in this arena. Businesses are getting more digitized with every passing day, hence making their data and private information more vulnerable to cyber attacks. Hence, it is but only natural for IT companies to employ maximum security measures as they continue to develop the latest technologies for their clients. Continuous testing and maintenance of systems is a must to be able to stay one step ahead in the game.

Furthermore, automation and technologies of Industry 4.0 will also influence the workings of the IT industry. For instance, Artificial intelligence (AI) is already being used by many software companies to code, fix bug errors, and test software, which makes the life of a developer much easier in the process. This fact, of course, brings in the cause of concern among developers and programmers, of being replaced by robots in the workplace. This concern is relevant especially when a report like that from Horses for Sources predicts that India might to lose over 640,000 jobs to IT automation by the year 2021. But, this only holds true for those who are not in the loop with technology as it grows because there are other reports that state that the advancement in technology will create over 133 million new jobs as opposed to the 75 million that will be made obsolete.

The future of the Indian IT industry will heavily rely on the supply-demand chain. As digitization becomes more ubiquitous, it is only natural that the demand for IT services will be on a rise. This, in turn, will place a heavier responsibility on IT organizations due to increased competition in the market. In this scenario, it is only evident that the services of the IT industry will only come across as absolutely necessary in the future.

Infographic: Artificial Intelligence and Benefits Businesses can Reap From it

Infographic: Artificial Intelligence and Benefits Businesses can Reap From it

Artificial is changing business functions worldwide. The infographic gives an insight on the holistic benefits of using the technology.