Information Technology has been recognized as the "enabler" of business in the 21st century. The rapid growth of IT within India bodes well for companies that plan to expand operations internationally and especially in India. This may not have been true a few years back but is definitely true of the present.

The overall success of the IT industry in India has to some extent managed to spill over to other industries in the country. The Indian economy has grown at the rate of 6.6% a year for 1998 and 1999.  In the last five years (1994-1999), the Indian IT Industry has recorded a C.A.G.R. (Compounded Annual Growth Rate) of more than 40.5% which is almost double the growth rate of the IT industry in many of the developed countries. The business scenario within the country has gradually evolved and the credit goes to the government and the private sector. Business practices, infrastructure, knowledge base have all improved tremendously in the last decade. The Internet has wielded its magic as the great equalizer and in bringing distant  places together, has brought India closer to the rest of the world, thereby boosting its developement efforts.

Interestingly, and fortunately for India, we are now witnessing a phenomena of "reverse brain drain". Indians, who left the country in search for better and bigger oppurtunties, are coming back. They bring back with them diverse international experience, knowledge of latest technology, management skills and much more. This can only increase India's attraction to MNC's as a business location.

The last few years have witnessed increasing emphasis on management education along with technological input. Graduates from Management institutes are capable of managing large projects and the challenges within a global firm. What this translates into is that Global firms have a ready supply of local managers to manage their Indian operations. This not only drives down labor costs but also improves business prospects for the local subsidiary. MNC's are required to recruit a minimum number of employees from the local market. In the 1980's, doing so would have adversely affected daily operations. Today, with the ready availability of an able work force, MNC's can win government favor by willingly recruiting local managers. With a large pool of trained IT professionals, India is a viable choice of new IT and non-IT ventures.

The Department of Information Technology and the Department of Telecom are pursuing very aggresive policies with regards to IT infrastructure. In view of their ambitious plans, the IT landscape within the country will change dramatically in the coming decade. Already, the advent of high speed lines, satellites, cyber parks, etc, is moving e-commerce and e-business ahead in leaps and bounds.

There is a distinct difference in the attitudes, buying behavior,  and outlook of the younger generation (ages 35 and below) when compared to the older generation (ages 35 and above). A well-educated and informed consumer base supplies the base for a competitive market scenario, which is essential for the developement of any industry. Young Indian consumers are definitely tech savvy, well traveled, better informed and more sophisticated than their predecessors.. They present a challenging and attractive market for a diverse set of products ranging from consumer goods, to real estate, to electronics, home appliances, etc.

If an MNC was evaluating multiple locations across the globe for new business operations, India would definitely be within the consideration set. The present scenario and the expected future scenario within the country, supports its move into the choice set. Taking all factors into consideration, India is a good location for manufacturing activities and to a certain extent, sales activities. If developement continues at the current pace, in a few years, infrastructure should be developed enough to support distribution activities also. But at the present, India's existing physical infrastructure comes a poor second to many other Asian countries.
 
 
 

Return to:The Information Technology Landscape in Nations around the world
Report created for: INITEB in the program of MoGIT at the Kogod School of Business, American University,Washington D.C.