Information Technology (IT) industry in India is one of the most rapidly growing industry in the world. The Indian software industry has not only carved a niche for itself, it also heading to become the global hub of knowledge in the near future. The industry mainly comprises of the software and other information technology based services which also includes business process outsourcing (BPO), KPO and consultancy services. From the initial glitch and slow start in the early 1970s, when the Tata Consultancy Services (TCS) was first asked to export programmers for the installation of system software for a U.S.A based client, the industry has made rapid strides in the field.
Local markets were then non-existent.Terms such SEO were completely unheard of. and the government policy towards the private sector was adverse.

At that time the Indian economy was almost entirely state-owned and more of a “closed” economy. Tariffs were as high as 135% and 100% on the software and hardware Imports. What’s more the software was not considered an "industry" by itself at all, deeming exporters unfit for any bank loans.
With (late) Rajeev Gandhi becoming the Prime Minister in 1984 the Government policy towards the IT sector saw a paradigm shift. The New Computer Policy (1984) brought many drastic changes Major among them being:
Subsidized tariffs on imports
Reduced import tariffs on hardware and software
Recognition as an “industry”
Thanks to The liberal policies for they laid the very foundation of a truly world-class IT industry in India. Today, Indian IT service providers such as Tata Consultancy Services (TCS) HCL, Infosys, Wipro, to name a few, are well known in the international market for their superb technical expertise. Many factors can be pinpointed for such phenomenal growth of the sector in India:

Educational System: with greater emphasis on math and science
Abundant Human Resource: quality HR with good technical, analytical as well as English-speaking skills.
Low Costs plus adequate Infrastructure
Quite favorable government policies
Strategically located
On a more personal note it can be said that the people here sort of “love” technology. Even folks from the lower most strata like to try to their hands on the new (though cheap) gadgets coming in the market, every now and then. And they sort of take pride in this thing. Getting back to the story, The Indian software services exports reached a 25 percent growth during 2002-03, touching revenue of 9.5 billion dollars.
The estimated growth for 2008-09 is expected to be about 35 percents. The most challenging concerns are:
o India is getting close competition from china
o Thoughts like “are we heading towards saturation?”
o Quality crunch
o Increasing shortage of cheap labor
o Infrastructure bottlenecks etc
The solution to all of these situations ‘lies’ in doing more of research and still more research. With technological up gradations by the nano second the IT sector on the alert mode. India just can’t rest on its laurels. China, Brazil, Thailand are fast emerging as strong competitors with their economies upbeat and the people all ready to face the world! Of course the subcontinent giant understands this fact quite well. Investments in the industry are already up by 12 times and the country registered a roaring GDP of 7.5 percent in the fiscal year 2007-08.

The Indian IT saga has come a long way and has as of now, to cover even a further distance to cover. India continues to remain one of the leading soft powers across the globe and definitely rise as the future world hub of knowledge.

Article Source: http://www.articleset.com