India has emerged over the last 20 years as the most preferred destination for outsourcing of Information Technology (IT) services. The vibrant IT industry is contributing immensely by providing information about latest technology and international business practices. Various sectors of the Indian economy, such as industry, finance, insurance, communications and transport, have adopted IT in a big way. Trade in IT and IT-enabled services has been the main driver of growth in India's trade in services in recent years.
Starting out with basic data entry tasks, the industry has rapidly acquired a reputation as the primary low-cost destination for voice-based customer contact/support services, finance and accounting, and a range of back-office processing activities. The past few years have seen the scope of these services expanding to include increasingly more complex processes involving rule-based decision making and research/analytics services requiring informed individual judgment and domain/vertical knowledge.
Indian companies adopt all the modes for supply of IT services abroad. The larger companies have set up wholly-owned subsidiaries in USA, UK and the European continent or have opened branches to facilitate the supply of services. Some of them have adopted the strategy of acquiring local companies or entering into strategic partnerships with them. They use quality processes, innovative technologies and delivery models of acquired companies to penetrate the local market. They permanent employees or hire consultants based in the host country.
However, there are certain areas of concern which need to be given the desired policy attention and weightage. Some of these are: (a) sustainability of high growth rate of software exports in future, (b) shortage of skilled labour, (c) low diffusion of information technology in the diffusion of information technology in the domestic market, (d) lagging hardware sector, (e) regional concentration and (f) excessive dependence on USA. Hence, there is a need for recasting of approach to the growth of IT sector. Dispassionate debate/discussion on the various aspects of Indian IT sector is a necessary requirement for such a rethink. It is against this backdrop that the present volume seeks to provide answers to some of the key issues and question. It consists of 16 research papers, authored by eminent scholars in the field, which have been categorised in the following 3 theme parts: Part I: Performance, Challenges and Prospects of Indian IT Sector, Part II: Diffusion (Use) of IT into Other Sectors of the Economy and Part III: Social Aspects of IT Sector.
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