Information Technology (IT)
Between 2009 and 2014, the Indian IT sector grew 11.9% annually. Revenues total approximately $105 billion—$86 billion from exports and $19 billion from domestic consumption.
The sector is divided into four main categories: IT services, business process management, software products and engineering services, and hardware. About 90% of India’s IT software and service exports are sent to the U.S. and the European Union.
The Silicon Valley of India
Located in the southern state of Karnataka, Bangalore is known as the “Silicon Valley of India” and is the outsourcing capital of the world for software development. There are many engineering colleges in the state and therefore a large workforce of skilled employees. Many IT companies are situated in this area, which is divided into two main clusters:
- Electronic City – IT park located in the Bangalore Urban district; home to over 180 IT companies including 3M, Hewlett Packard, Siemens, Infosys, and Wipro
- Whitefield – neighborhood containing the Export Promotion Industrial Park zone which provides campus facilities for groups such as SAP, iGATE, Dell, TCS, Unisys, Delphi, Huawei, Oracle, and Perot Systems
Additional clusters in Bangalore include Bellandur, Hebbal, and Challaghatta. Companies located in these areas include Deloitte, Cadence, Nokia, ARM, Accenture, JP Morgan Chase, and SanDisk.
Other IT centers in India include Chennai and Hyderabad in the south, Mumbai and Pune in the west, and Delhi National Capital Region (Noida and Gurgaon).
There are over 4,500 IT companies in India. Large companies comprise 48% of IT exports; medium companies comprise a third. With the rise of social, mobile, analytics, and cloud services, small and medium-sized enterprises increasingly contribute to the sector. Small emerging companies focus on specific topics such as cloud/big data, education, mobile, IT services, social media, e-commerce, and business productivity tools.
Top Indian IT firms include:
- Tata Consultancy Services – IT services including system integration, testing, application development, and management services and solutions
- Infosys – IT services including application outsourcing, application, independent validation and testing, and infrastructure management
- Wipro – IT services including IT strategy, IT organization design and operating model, enterprise resource management strategy and design, IT spend optimization, governance, risk and compliance, IT simplification, service modelling, and service integration and management
- Tech Mahindra –enterprise business solutions, application development and maintenance, and infrastructure services
- Hindustan Computers Limited Technologies – application management, business analytics, business assurance and testing, business process outsourcing, engineering and research and development, Gen 2.0, IT infrastructure management services, mobility, and system integration
Major foreign companies investing in India’s IT sector include:
- Dell (Texas) – ranked number one healthcare IT services provider by Gartner Inc.; specializes in e-commerce for tech products
- Hewlett Packard (California) – development and manufacture of computing products, data storage and networking hardware, software design and delivering services
- SAP (Germany) – IT management solutions
- Oracle Corporation (California) – engineering systems, big data, and cloud products
- Cognizant (New Jersey) – consulting, engineering and manufacturing solutions, portals and content management, and IT infrastructure services; most of Cognizant’s staff is located in India
- Intel (California) – processors, boards, chipsets, solid-state drives, server products, networking and communications, and wireless
India and the U.S. plan on pursuing India’s $18.2 billion Digital India Initiative. This is the Indian government’s proposal for advancing the country’s technological capacities.
Software Technology Parks of India (STPIs) & Special Economic Zones (SEZs)
STPIs and SEZs are organizations established by the Indian government to increase exports, revenue, employment, and foreign direct investment. They offer benefits such as tax exemptions, 100% FDI, and single-window clearance for unit setup.
A main difference between STPIs and SEZs is that STPIs are specific to the IT sector. They are part of the export-oriented STP scheme that combines export-oriented units, export processing zones, and modern science and technology parks. Unlike STPIs, SEZs function as free trade zones providing companies with special economic liberties. Another important difference is that SEZ units can only be set up in SEZ park areas whereas STPI units can be stationed anywhere in the country.
Over half of the 202 SEZs in India specialize in IT or electronics software. There are 53 STPI centers across India.