IT Industry

The IT industry is one of the most key industries for any modern developing and even developed countries and the same can be said of India.

After the country’s post liberalization reforms of the early 1990’s, the IT industry in India has grown steadfastly and rapidly from US $150 million to a huge US $56 billion today.

This can be explained in part by the fact that the industry has been registering annual growths averaging thirty percent over the last decade.

The liberalization reforms removed a number of government regulations allowing for the inflow of both domestic and foreign investments into the industry and thus began the new IT era.

Earlier in the 1970’s IT companies and in particular IBM were forced to abandon India as a result of restrictive import duties but after the liberalization of the economy in India, a good number of IT corporations including IBM and HP were able to set up shop in the country and in effect fueled an unprecedented growth in the industry that saw it grow twice as fast as that of the US.

Experts point at a number of factors that could be attributed to this phenomenal growth which include the widespread availability of skilled labour, the government’s deregulation policies and incentives, low telecommunication costs, cuts in import duty of software among others.

The industry now meets the demands of both local and foreign markets with the latter contributing to three quarters of its total revenue.

This has been aided by the relatively low costs of the English speaking Indian IT professionals, a fact that has led to the growing reputation of the country being a cost efficient source for cost effective IT enabled services like business and knowledge process outsourcing. Many jobs have been created as a result and the economy of India has stood to gain significantly.

The IT enabled services in India were recorded to have put out revenue of about $55 billion in the last financial year of which $20 billion were attributed to the local market. This implies that the industry plays a huge role in the flow of foreign direct investments and thus contributing enormously to the economy in India.

There are challenges facing the industry the most important of which is the sustenance of growth. It is however agreed that innovative measures in business structures, education and ecosystems will go a long way to ensure the industry continues growing.