Configuration of Indian Software Industry

The IT Task Force has set a vision of making India an IT superpower by 2008. While the Task Force recognises that software and hardware are the two sides of a gold coin, its report is oblivious to the mechanism that would establish an interdependent growth path for the IT industry of India. It has been argued in this paper that the weakness of the Indian software industry continues because of its weak linkages with the domestic manufacturing industry where rests the scope of critical software capability - the high skill/high risk/high value embedded software segment that can flourish only with wide applications of microelectronics in the industrial products and processes. This is the segment that offers the opportunity for interdependent growth of both hardware and software sectors of the Indian IT industry. The structure of Indian IT industry that supports low value/low skill products and services is not strong enough to enter the high investment high R and D area of the embedded software segment without a strong strategic push.