Information and Communication Technology (ICT) in India

The Indian IT industry has not only transformed India's image on the global platform, but also fuelled economic growth by energising higher education sector (especially in engineering and computer science). The industry has employed almost 10 million Indians and hence, has contributed a lot to social transformation in the country. The Indian IT industry has continued to perform its role as the most consistent growth driver for the economy. Service, software exports and business process outsourcing (BPO) remain the mainstay of the sector. Over the last five years, the IT industry has grown at a remarkable pace. A majority of the Fortune 500 and Global 2000 corporations are sourcing IT from India and it is the premier destination for the global sourcing of IT, accounting for 55 per cent of the global market in offshore IT services and garnering 35 per cent of the ITES/BPO market.

Furthermore, IT spending in India is projected to reach US$ 71.5 billion in 2013, an increase of 7.7 per cent as compared to US$ 66.4 billion projected for 2012, as per a report by Gartner.

On the other hand, the telecommunication services have been recognised as an important tool for socio-economic development of a nation. It is one of the prime support services needed for rapid growth and modernisation of various sectors of the economy.

India with a user base of 120 million is the world's third largest internet market and is poised to have up to 370 million users in 2015.

India is expected to have 130.6 million mobile internet users by March 2014, according to a joint study by the Internet and Mobile Association of India (IAMAI) and Indian Market Research Bureau (IMRB). The number of users accessing internet through mobile devices was 87.1 million in December 2012.

The Indian mobile phone market is highly competitive with more than 150 device manufacturers trying to woo the consumers with their offerings. Most of these producers focus their efforts on the low-cost feature phone market, which constitutes over 91 per cent of overall mobile phone sales, offering a huge scope for growth. Manufacturers like ZTE, Micromax, Karbonn Mobile, Huawei stood at sixth, seventh and twelfth positions respectively, in the Indian smartphone market in the first half of 2012. They are constantly enhancing their smartphone portfolio to compete with big global manufacturers like Samsung and Nokia, which held the first and second position respectively.

Indian IT's core competencies and strengths have placed it on the international canvas, attracting investments from major countries.

To create investor friendly opportunities, the Ministry of Communications & Information Technology in the Annual report, 2011-12 stated that the Government of India plans to set up a transparent investment policy. Information Technology Investment Regions (ITIRs) offering superior infrastructure and friendly policy environment will be set up across the country. Under the new policies, all Indian States / Union Territories can set up integrated townships for facilitating growth of IT/ BPO and Sunrise Industries with world class infrastructure.

Karnataka, Andhra Pradesh, Odisha and Tamil Nadu are the first four states to take the initiatives in sending proposals to the Government for setting up IT Township facilities.

More recently, online retailing, cloud computing and e-commerce are the major driving forces behind the rapidly increasing growth in the IT industry. Online shopping has increased with the emergence of internet retailing and e-commerce.

FDI up to 100 per cent is allowed for the following activities in the Indian Telecom Sector:

• ISPs not providing gateways (both for satellite and submarine cables)
• Infrastructure Providers providing Dark Fiber
• Electronic Mail
• Voice Mail

Source: Consolidated FDI Policy, Department of Industrial Policy & Promotion (DIPP)

The Cabinet has recently approved the National Policy on Information Technology 2012. Some of the thrust areas of the policy include:

• To increase revenues of IT and ITES (Information Technology Enabled Services) Industry from US$ 100 billion currently to US$ 300 billion by 2020 and expand exports from US$ 69 billion currently to US$ 200 billion by 2020
• To gain significant global market-share in emerging technologies and Services
• To promote innovation and research and development (R&D) in cutting edge technologies and development of applications and solutions in areas like localisation, location based services, mobile value added services, cloud computing, social media and utility models
• To encourage adoption of ICTs in key economic and strategic sectors to improve their competitiveness and productivity
• To provide fiscal benefits to small medium enterprises (SME) and startups for adoption of IT in value creation
• To create a pool of 10 million additional skilled manpower in ICT
• To make at least one individual in every household e-literate
• To provide for mandatory delivery of and affordable access to all public services in electronic mode
• To enhance transparency, accountability, efficiency, reliability and decentralisation in Government and in particular, in delivery of public services
• To leverage ICT for key Social Sector initiatives like Education, Health, Rural Development and Financial Services to promote equity and quality