Globalizing Information Technology: The Domestic Policy Context for India’s Software Production and Exports

This essay explains how the domestic policy context enabled the Indian software industry to become the largest non-OECD (Organisation for Economic Co-operation and Development) exporter by 2000. The policy context is examined in three phases. Prior to 1984, rigid policy restrictions ensured that there was virtually no software industry. In the second phase (1984 to 1990), the restrictions were eased and Indian firms entered the global market by providing low-cost programming services. In the third phase (1990 to 2000), pro-active promotion of the industry, along with economy-wide policy liberalization, led to rapid growth in exports. The nature of exports also changed from providing programming services at client sites, to providing offshore services from India for turnkey projects demanding a wider range of capabilities. The policy changes themselves are explained in terms of the changing character of state institutions. The essay also discusses the relevance of the Indian case for policy initiatives in other countries.