India’s software industry is one of the world’s successful information technology industries. Begun in 1974, it employed 345,000 persons in 2004 and earned revenue of $12.2 bn, equal to 3.3% of global software services spending. This paper’s object is to explain the industry’s origins, growth and sustainability. As we shall show, the industry originated under untypical conditions. Local markets were absent and government policy toward private enterprise was hostile.
These conditions influenced the industry’s origins. The industry was begun by Bombay-based conglomerates which entered the business by supplying global IT firms located overseas with programmers. Their success owed to the innovative exploitation of a new global market opportunity and protection from transnational corporations and startups by policy.