13 reasons for success of Indian software industry


The success story of Indian IT outsourcing / offshoring is studied closely by emerging economies from Asia and Eastern European countries in hopes of emulating it.
Have you thought about the ingredients that are needed to be on top ?
If one has to put down briefly, I would broadly segregate them in 13 points:

Here they are according to me. (let me know if I have missed something):

1) The number one reason has to be the large

2) The (one of the rare positives of Indian invasion by British)

3) Low wages in India as compared to West. Although this factor is , it was one of the main reasons for International Software companies to .

4) The itself is a huge contributor. For e.g: Parent’s commitment to children’s education. The importance of education is ingrained by them on their children at a very young age. They see good education as the only means to have .

5) As much as Indian IT Industry has grown due to offshoring, equal amount of credit should go to growth of domestic companies in , retail, banking, , manufacturing etc. They have equally contributed in its growth .

6) The . More than 60% of Indian people are below age 25 !

7) The starting in early nineties. A lot of credit goes to then Finance Minister and current Prime Minister – Manmohan Singh. The outsourcing / offshoring started taking roots due to the change in policies back then.

8 ) Partial privatization and growth in , in late nineties. forms an integral part of Information technology Industry.

9) The rapid growth in IT parks in India in last 10 years. Government setup SEZs (specialized economic zones), where opening of software services companies would get certain tax subsidies. This attracted lot of companies to setup software shops.

10) The tax breaks and sops offered by Indian government for upcoming software firms. This made India one of the most attractive markets for setting up Software shop.

11) The commitment of Indians towards their work. It is a common knowledge that people in Software Industry normally put more than 10 hours a day in their work. I do not subscribe to the view that working long hours necessarily leads to higher productivity, but I think this “hard working Indians” definitely plays on people’s mind.

12) Rapid growth in Infrastructure and transportation facilities that started in mid nineties. Yes, we still have to go a long way yet, but we are moving in right direction.

13) The entrepreneurial spirit and Innovative tilt of Indians. This may be controversial, however I think it is a factor that has made Infosys and Wipro such huge success stories !

Update: suggestion by Indian Blogger

14) The time difference is one of the reasons for growth of Indian IT Industry. Western countries get advantage of having a 24 hour work cycle.

If I have missed some, drop in a comment and I will add them here.

  1. Hamid Ali Khan says

    there is not mention, what should do a software Er,
    EveryOne one Do HardWork, but not mention any point for Motivation, to any Fresher S/W Er.

  2. SRISAAS says

    Now the time has come for Indian IT industry to discover new strengths and start creating a niche for itself.!

  3. Vikram Parasmal Mutha says

    Must Read……

  4. Vikram Parasmal Mutha says

    Must Read……

  5. Vivek Kulkarni says

    By making flowery conception of growth of IT, We are just making ourselves as cheap laborers of west..we'll never develop in true sense just by doing this..we have to become independent..not SERVING them..

  6. mansouri says

    hi your article’s great but not inoff for such persons who want’s to follow your steps with same posits! I need to know more about details if you have so let me in!

  7. Saurabh says

    2) The highest number of English speaking people. (one of the rare positives of Indian invasion by British)
    There are lots of other English speaking countries in all over the world. But they cant work in Software Industry. Even in US there are a lot of native speaker of English but still they r not able to work in Software. The actual reason is we are sharp minded & dedicated to work. Yes English makes easier to communicate with US & Britain but that can not be reason no. 2. it should be the last reason because keeping a knowledge is not equal keeping English. If somebody have knowledge he/she can have interpreter but somebody speak English doesn’t mean he/she can have knowledge. Hence, we have vast knowledge this also because of root of our culture that should be no. 1 or 2.

  8. nikhila says

    excellent work! It would be more efficient if you explain in much detail

  9. Chandra says

    * Lack of prospect in other fields drives all talent to IT
    * Devaluation of Rupee would mean better relative salaries
    * Devaluation of a common engineer… most companies in the manufacturing sector hardly value their engineers because in the protected economy they have been so used to buying old tech from the west and selling it as new so they never had any value for inovation, and they continue to do so.

    But otherwise given our bad education system, mediocracy and lack of risk taking in IT companies (shit we have nothing close to China in IT products, web service), we are pretty much shitting ourself with false glory….period.

    Message: We are in total shit unless we come out of our day dreaming and stop blowing into our fragile ego’s we are leaving behind a Somalia for our next generation.

  10. kwlamf says

    Indian must possess certain intrinsic characters which contributes the glory and honour in IT field. Can any Indian tell me what they are ?

  11. Shambhavi says

    Hey, nice blog..so much useful..can you please expand it to current IT trends in India & focus some more on the slack-down issue.. would love to hear more from you..Thank you, so much..

  12. ricki says

    What a terrible dutch! Who translated this page? I hope the english of the indians is better…

  13. rh mayo says


    sorry took me some time to come back with a clarification. I am defining Experience inflation and misrepresentation where resumes are being doctored and misrepresent the experience and expertise. Too many candidates claim technical knowledge in areas where they really don’t have any. It includes falsifying documents for educational, training and wages.

  14. Gurmeet Katar says

    Good article.
    Also, India has been able to deliver quality work.

  15. malai arasan says

    hi..i’m malai i accepted your think.
    but indian people education system is totaly mugup.
    so, if we change this stage,indian software system will go very

  16. trakin says

    Rh Mayo…
    Well said..I completely agree with the points that you have mentioned. I do not see Wage inflation as too much of a problem, because offshoring for low cost advantage is becoming thing of past. Offshoring / Outsourcing to India happens due to quality that Indian software houses churn out with high percentage of predictibility…Recent McKinsey survey also shows that low cost advantage is not a big factor anymore….
    Can you elaborate on last point you mentioned…

  17. rh mayo says

    There are other reasons why we still have a 10 year lead:

    Seasoned and experienced Project managers in large numbers familiar with Offshore development
    Large pool of middle managers with strong development experience. China will need at least 5-8 years to build this critical mass for projects requiring 100+ people
    Experience in all technologies from a Business perspective not just rechnical.
    ith large ERP projects knowing the nuances of business practices in local domains is critical, and it is difficult to leverage the chinese experience to a global perpective. Till the Chines employees have enough work knowledge in western countries this will reamin a lacunae.

    For these reasons amongst others I believe that India has a 5-8 years advantage. However there are sme problems that will kill the golden goose

    Employee retention
    Wage inflation
    Experience inflation and misrepresentation

  18. trakin says

    Yes Indian Blogger, that is well caught. This is true especially for American Firms who outsource to India and more than 70% outsourcing work comes from US.

  19. Indian Blogger says

    Time zone difference ( 12 hr) is another factor. Work then happens 24/7. Also, increase in the number of engineering colleges in India ( perhaps this is to meet the growing demand of the ITservices firm).

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