India's IT Industry

April 29, 2010India IT Industryby EconomyWatch


Information Technology is one of the most important industries in the Indian economy. The IT industry of India has registered huge growth in recent years. India's IT industry grew from 150 million US Dollars in 1990-1991 to a whopping 50 billion UD Dollars in 2006-2007. In the last ten years the Information Technology industry in India has grown at an average annual rate of 30%.

The liberalization of the Indian economy in the early nineties has played a major role in the growth of the IT industry of India. Deregulation policies adopted by the Government of India have led to substantial domestic investment and inflow of foreign capital to this industry. In 1970, high import duties had forced IBM to leave India. However, after the early nineties, many multi national IT companies, including IBM, have set up their operations in India. During the ten year period 1992-2002, the Indian software industry grew at double the rate as the US software industry.

Some of the major reasons for the significant growth of the IT industry of India are -

  • Abundant availability of skilled manpower
  • Reduced telecommunication and internet costs
  • Reduced import duties on software and hardware products
  • Cost advantages
  • Encouraging government policies

    Some of the major companies in the IT industry of India are -

  • Tata Consultancy Services (TCS)
  • Infosys
  • Wipro
  • IBM
  • HP
  • HCL
  • Cognizant Technology Solutions (CTS)
  • Patni
  • Satyam
  • NIIT

    India's IT industry caters to both domestic and export markets. Exports contribute around 75% of the total revenue of the IT industry in India. The IT industry can be broadly divided into four segments -

  • IT services
  • Softwares (includes both engineering and Research and Development)
  • Hardware

    HR Software
    Cost effective payroll and HR software solutions from KCS.

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