India is the only one among developing countries, which decided to choose as the main drive of its economy not selling natural resources, but investing into new technologies and their implementation. The results are more than impressive. Indian technological market became one of the fastest growing in the world.
I know you might be thinking, that I have the aim to sing the praises. Yeah, well only if there are some reasons for that.
Many people took a wrong track in understanding India and its market. I was observing the IT miracle that was happening after 1985, when the government proclaimed IT technologies as the top most priority in development. Today I would like to share with you some thoughts on our technical future. As always you are the one, who has to judge.
It’s hard to believe, but the IT in the once backward India is experiencing a real boom: from $ 6.5 billion in 1998, the industry’s revenues rose to $ 22.1 billion in 2004 and continue growing by 22-24% annually. Some time ago, analysts and I expressed fears that such rates will not last for a long time, as the growth was provoked mainly with the external market. However, these fears were not confirmed.
The dividends from the brain investments
The idea of the priority in the development of high technologies as the basis for the country’s future economy arose more than half a century ago. The Prime Minister Jawaharlal Nehru, who laid the foundations of Indian economic modernization, believed that there was no other way to make a Modernization Leap for a country, which don’t have enough natural resources for external market sale. As a result, the Indian leadership placed a stake on investing in the brain – educating the people and using intellectual potential to create modern technologies.
Local Silicon Valleys or where the miracle is happening
Technoparks were created as a governmental initiative, in order to generate the growth in those branches of the economy, where there were prerequisites of the high tech exports development. All in all, this step contributed in the success of IT industry. Only in last fiscal year India exported software and services for more than $ 16 billion. Nowadays, IT technologies have become the main driving force of the country’s industrial growth (more than half of GDP belongs to this sector). All in all, in India there are 35 state and 25 private technology parks and the number is growing rapidly.
The key to success: foreign capital and local resourcefulness.
It all started after several airlines (American Express, British Airways and Swissair) decided, that it would have been far cheaper to outsource the tickets booking and personal data storage in India. You might ask why? Obviously, these industry giants counted all the pros and cons before making such decisions. Among the main reasons we can state the cheaper man-hour and higher diligence. Nowadays, it’s not a huge secret; many companies from Europe and US started using this outsourcing scheme to reduce their service cost.
In 2012 Leonid Boguslavsky, the Russian businessman, invested in the raw start-up $170 million as the venture capital. After 5 years the total cost of the company is more than $ 10.5 billion and the investor occupies the 84th place in Forbes Word’s billionaires’ list. Impressive isn’t it. If you still have no idea, I was talking about Kunal Bahl’s Snapdeal. I guess, you are surprised, but you shouldn’t.
All in all, Indian IT market is growing rapidly so far and has a great potential to become one of the biggest in the World. There is only one question: are you ready to sacrifice the stereotypes and extend your business? If you are still hesitating about outsourcing in India, check out our page to know more about the projects we’ve successfully developed. Don’t forget to follow us on Facebook for more useful articles.