India’s IT & BPO Industry

Chapter

Abstract

In the early days of India’s independence, agriculture contributed to 55.4 percent of national income, compared to only 16.6 percent m 2007. More than 30 years ago, India decided that if it was ever to become a global player and developed country, it would first have to become an information technology country and build on its historical reputation in mathematics. The central planning in the 1970s actually helped to kick off a long-term plan, focusing initially on education and training. Having first ensured the availability of human resources for the IT market, India’s government then wanted to create a business-friendly environment for the IT services industry. But it also wanted to ensure that foreign direct investment would fall in line with India’s development priorities. The Foreign Exchange Regulation Act (FERA) became effective on January 1, 1974, and was India’s means to achieve this objective. In 1977, business became in fact so uncomfortable for foreign companies that IBM decided to pull out entirely from the country. IBM had commenced operations in India in 1955 with long-term objectives for growth and increase of market share through an improved competitive stance. The Reserve Bank of India (RBI) had analyzed IBM’s activities in India and concluded that IBM had to reduce its foreign equity to 40 percent. The Government of India contended that IBM was reaping very high profits from importing the then already obsolete and outdated IBM 1401 computer system which was sold and leased at standard global rates. IBM was repatriating these profits without transferring any sophisticated technology to India.

Keywords

Multinational Company Software Process Improvement Compound Annual Growth Rate National Capital Region Revenue Productivity 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.
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