Abstract
This chapter illustrates that the software services industry in India is the largest in the developing world and that the leading Indian software firms have been successfully competing against established Western software service firms in the most lucrative segments of the services market for over a decade. The chapter examines the mechanisms and processes through which the Indian software services industry in general, and its major indigenous firms in particular, have developed. It finds that while substantive and contrasting forms of state intervention have played an important part in facilitating the industry’s rapid development, changes in market conditions and indirect yet fortuitous outcomes from industrial policy in other sectors also have proved crucial.
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Notes
- 1.
Although there can admittedly be some overlap. Microsoft does have a services division and Infosys—one of India’s major software service providers—has brought to market several software packages such as its best-selling banking product Finnacle. Nevertheless, revenue streams from Microsoft’s service division and Infosys’ packages are negligible vis-à-vis those generated by the firm’s core competencies.
- 2.
It should be noted that the third type of service is sometimes excluded from analyses of software services due to its tenuous link to the writing of software. In this article ITES will however be included as a software service, in line with more contemporary studies.
- 3.
Although the highest value-added sub-lines of IT consulting and systems integration accounted for just 4 % of total export revenues—see the statistical database of the National Association of Software and Service Companies, available at www.nasscom.in
- 4.
India has never had a strong software package industry, mainly because of problems associated with software piracy.
- 5.
The most famous/infamous policy ‘punishing’ the business houses was the 1969 Monopolies and Restrictive Trade Practices (MRTP) Act.
- 6.
Plans by the Indian government to dilute (through part Indian ownership) an IBM subsidiary in India that was manufacturing printers and convert it into a computer manufacturer failed. IBM’s top management opposed the dilution plans and—as a result—was forced to close down the subsidiary and leave the country.
- 7.
Such as the 1984 New Computer Policy.
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Saraswati, J. (2016). The Development of the Indian Software Services Industry. In: Sato, Y., Sato, H. (eds) Varieties and Alternatives of Catching-up. IDE-JETRO Series. Palgrave Macmillan, London. https://doi.org/10.1057/978-1-137-59780-9_10
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