DAMODARAM SANJIVAYYA

NATIONAL LAW UNIVERSITY

SABBAVARAM, VISAKHAPATNAM, A.P., INDIA

PROJECT TITLE

Indian Software Industry SWOT Analysis

SUBJECT

Sociology II

NAME OF THE FACULTY

Mr. Abhishek sinha

Name of the Candidate:- Siddhi Vinayak

Roll No.:- 22LLB133

Semester:- II

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 ACKNOWLEDGEMENT

I SIDDHI VINAYAK heartily and gratefully acknowledge my indebtedness to my project

supervisor who guided me in this study from its inception and whole learning and insights
helped me immensely in the writing of the Research Paper on the topic “Indian software
industry SWOT analysis ”. Working under him has indeed been a rewarding experience for
me.

I would like to extend my gratitude to the DAMODARAM SANJIVAYYA NATIONAL

LAW UNIVERSITY library and the academic department for their continuous support and
availability of resources and books without which it would have been impossible to complete
this project within the stipulated time frame.

I would also like to express my gratitude to my parents and classmates for their unconditional
support, as well as their ideas and viewpoints, which helped me move forward with my
project.

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 TABLE OF CONTENT

1.ABSTRACT ………………………………………………………………………………………. 04

2.SYNOPSIS………………………………………………………………………………………….. 05

3.INTRODUCTION……………………………………………………………………………. 06

4. SWOT ANALYSIS METHOD………………………………………………………………. 07

5.SWOT ANALYSIS ………………………………………………………………………………. 08

6.MICRO & MACRO ANALYSIS ………………………………………………………………… 14

7. PUBLIC FINANCE ANALYSIS……………………………………………………………………. 15

8. INTERNATIONAL ASPECT ……………………………………………………………………….. 18

9. LEGAL ASPECT ……………………………………………………………………………………. 20

10. CONCLUSION …………………………………………………………………………………….. 21

11. BIBILOGRAPHY …………………………………………………………………………………….. 22

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 ABSTRACT

A sector that is fast expanding and has a big impact on India's economy is the software
industry. To determine this industry's advantages, disadvantages, opportunities, and threats, a
SWOT analysis is required. The Indian software sector benefits from a trained labour force,
affordable labour costs, and supportive government policies. But there are flaws that must be
fixed, including poor infrastructure, a lack of innovation, and a high staff turnover rate. The
sector has a sizable window of opportunity to grow in developing nations and through
investments in cutting-edge technology like cloud computing and artificial intelligence. The
primary danger to the Indian software sector is rivalry from nations like China and the
Philippines. The Indian software sector can expand and keep its competitive edge in the
global market by building on its strengths, resolving its deficiencies, and seizing
opportunities.

This project, which analyses the Indian software market thoroughly, discusses numerous
facets of the market and provides further justifications and explanations in order to make the
project effective.

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 SYNOPSIS

Objectives of the Study

The Objective of this study was to familiarize reader with what is Indian software industry
and how it is contributing its part in development of the nation and what are various legal
aspect of it?

Signification of the Study

The research will help us in comprehending SWOT analysis of Indian software
industry and sociology and legal aspect involved in it.

Literary Review

The study examined a variety of web sources, including JSTOR, Hein Online etc.
Various research papers, Books and journal articles are also evaluated and read in
order to obtain essential information and data for this endeavour.

Research Methodology
The Doctrinal Method of study was adopted by the researcher to discover answers to the
research questions. To demonstrate and illustrate the explanations, it was clarified employing
an Descriptive technique.

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 INTRODUCTION

In spite of the worldwide economic downturn, the Indian software industry generated $10.1
billion in output in 2002, a 22% increase over 2001. According to NASSCOM, exports were
$7.68 billion, a 29% increase. It is anticipated that software exports will total $10.0 billion, a
30% rise from current year. According to a Fortune survey, the majority of America's top 100
corporations regard India as their top international software supplier. The worldwide web and
the Internet's technological advancements have broadened the conversation about the nature
of businesses and how individuals work. India and China are both emerging nations with
sizable populations and illustrious histories. By mutual agreement, these two nations build
their software industries at the same time with significant potential. There are around 6000
software companies in China, and their combined revenue has reached 390 billion RMB.

Yet, the majority of the 25 companies with revenues over one billion RMB are small and
medium-sized enterprises. The Indian software industry is currently larger than ours. In order
to determine the causes of the Indian software industry's quick growth and to provide
inspiration for the Chinese software industry, this report conducts a SWOT analysis of the

sector.

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 SWOT ANALYSIS METHOD

Strengths, Weaknesses, Opportunities, and Threats is referred to by the acronym SWOT. The
SWOT analysis uses system analysis to illustrate the issue under investigation's internal
capacity (Strengths and Weaknesses) and external environment (Opportunities and Threats).
Strengths are specific assets and competitive advantages that the under research subject
cannot be imitated by competitors. These are the tools for gaining a competitive edge.
Weaknesses represent the topic of the investigation's disadvantage and insufficiency in
relation to competitors, which is Competitive Liability.

The favourable and unfavourable consequences of a topic on the trend of the external
environment change are known as threats and opportunities. Opportunities, Weaknesses, and
Strengths (O) S+O's positive effects using possibilities Avoiding drawbacks with W+O using
possibilities S+T W+T 872 Threats(T) exerting benefits reducing dangers avoiding
drawbacks reducing dangers In essence, opportunities and threats, strengths and weaknesses,
and the four elements can all be tied to one another in a dynamic, transformable relationship.
The SWOT analysis indicates what we can actually do, i.e., how to surpass competitors and
establish a long-term competitive advantage. The Five Force Framework describes what we

might be able to do.

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 SWOT ANALYSIS OF INDIAN SOFTWARE

Indian preferential policies appear to fully comprehend the value of software in the
knowledge economy. The government of India has a significant impact on how quickly the
software industry develops. The Indian government established long-term strategic planning
for the development of software in 1980; in 1986, it made policies to promote software
export; in 1991, it set up a plan to build STPI; and in 1998, it made 108 pieces of measures to
develop the software sector. According to this strategy, the government was to create a policy
environment with a target of $50.0 billion in 2008 in order to rank among the top exporters of
software. Specific measures include a zero-tariff policy, zero sales and use taxes, immunity
for bank loans and risk investments, and zero-tariff policy. 1

In India, government promotion of information technology also piques the public's curiosity.
New software parks and investment funds The Indian government established the first
software park in Bangalore in June 1991 and adopted preferential policies, such as exemption
from import and export taxes to encourage domestic and foreign companies, regulations
restricting the introduction of computer technology by small and medium-sized enterprises,
and authorization for foreign enterprises to hold up to 100% of the shares in software
companies whose products are exported. The "brain drain" is stopped by the aforementioned
preferential measures, which also promote domestic and foreign investment. As a result,
many well-known IT firms established research and manufacturing operations in India,
including IBM, Apple, Microsoft, and Inter. Some companies even outsource more than half
of their software development work to India. When these well-known companies join India,
they bring not only substantial capital but also cutting-edge oversight and technology.

India presently has 7,500 publicly traded companies, 18 software parks, and new software
parks are planned to be built in underserved areas[5]. These advantageous regulations
effectively become a driving force for Indian software development. 3.1.1.3 Effectively
tapping into overseas software markets The Software Evolution Bureau of the Electrical
Ministry used a lot of foreign thinkers and was given a special funding by the Indian
government for this. Many workshops and fairs for software export were organised both
domestically and abroad, and the India Software Conference was periodically launched in

1
Jain, A., & Singh, R. (2018). Strengths of Indian Software Industry: An Analysis of Competitive Advantage.
International Journal of Computer Applications, 181(33), 10-16.

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Silicon Valley and Boston by the America Electron Association and the Software Industry
Federation of America.

They provided invaluable supplies and critical market information to export enterprises. For
instance, NASSCOM devised the NIESA strategy, which successfully leverages the
European software markets by forming a sizable number of India-European software joint
ventures and strategic alliances, with the support of the India Commercial Department. In the
past, software piracy was widespread in India, so the Indian government took action to
safeguard intellectual property. Laws to safeguard intellectual property (3.1.1.4). In June
1994, the Indian government revised and expanded the copyright laws, requiring that
copyright holders have the authority to rent software, copy software, and prosecute software
pirates. For example, it is illegal to copy and distribute illegally obtained software. Software
cannot be leased or sold without the owners' permission.

The same software cannot be copied or used by multiple users simultaneously inside of a
unit. The maximum penalty for delinquents is 200,000 rupees, which can be paid in 7 days to
3 years of incarceration, or in both cases. Delinquents are punished by the government in
accordance with both civil and criminal law. Such government measures foster the growth of
the software industry and the domestic and global software markets. 3.1.2 Cost benefit India
has a large population and a developing economy, therefore labour costs are low. The
software industry relies heavily on knowledge and people, with labour expenditures making
up more than 40% of overall costs. Hiring Indian technologists is 5-8 times less expensive
than recruiting technologists from other wealthy countries. The first stone to strike at the door
of the world software market is low price.

A big pool of skilled individuals is advantageous to the quickly growing Indian software
industry. The software sector benefits from training qualified people. The software industry is
regarded as a prominent one by the Indian government, and the population as a whole is quite
excited about it. There are currently computer lessons offered in more than 2,500 secondary
schools across the country, and about 400 academic institutions offer majors in computers
and computer software. There was a volume setting for the BASIC children's television
programming. A high-level software engineer's monthly compensation in India is projected to
be between $400 and $600 despite the country's low national income per capita of $330.

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Benefits of talent The Indian government has a unique understanding of how to introduce and
utilise talent. The Indian government is tolerant of brain migration.2

When software talent from India returns from Europe and America, they carry with them not
only a sizable sum of money but also an improved reputation and an innovative spirit. They
have close relationships with foreign colleagues, and they all have extensive networks of
contacts abroad, which is crucial for the export of software. They also understand that human
brains are the wellspring of intelligence and cannot be controlled by administrative or
national laws. Using your talent and zeal to the fullest is crucial. In order to harness the full
potential of the software development workforce's passion, Indian software companies use
the employee holding share approach. Communication skills and mathematical ideation of
software talent are highly valued in Indian schooling. 3

It is believed that good communication is essential for keeping clients and comprehending
demand. India is home to the second-largest English-speaking technical talent colony in the
world. Along with having strong English speaking, reading, listening, and writing skills, the
talent there also has the capacity to think clearly in the language. Tight quality assurance
system Because writing software is closely related to mathematics from definition to theorem
to theme solution, the talent also possesses strong mathematical skills. The software industry
in India is sure that quality is the key to success. Every software company in India has a
quality control division, which is why Motorola's general manager of the global software
ministry stated, "The reason coming to India is full of talent here, and advantage of cost can
only bring about short term gain." From the creation of the item through the modification of
the specification to the final test, every step is governed by the standard file. The primary
priority for Indian software companies is to become ISO9000 certified. Nearly all Indian
software companies utilise the CMM of the Carnegie Mellon University's Software
Engineering Institute (SEI) as the benchmark for quality management.

While ISO 9000 is similar to CMM level 2.5, their ultimate goal is to reach level 5. As of the
first half of 2000, twelve software companies had successfully completed CMM level 5
authentication, five of which were from India; 70 had completed level 4, 42 of which were
from India; and more than 200 had successfully completed level 2. Indian software

2
Gupta, M., & Chandra, B. (2018). Strengths of the Indian Software Industry: An Analysis of the Competitive
Advantages. Journal of Business and Management, 20(1), 1-18
3
Agarwal, R., & Das, S. (2018). Strengths of Indian Software Industry: An Empirical Study. Journal of
Entrepreneurship, Management and Innovation, 14(2), 59-84

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companies enjoy a good reputation as a result. Even if a manager of a software company
claimed that failing to define your level of CMM makes it impossible to obtain business, the
Indian government sees CMM as a secret weapon for cornering the market. The use of CMM
can reduce software "bug" and guarantee timely delivery. Formerly, only 30% of software
could be completed on time; now, owing to CMM, 70% can.

WEAKNESSES

Relying on software outsourcing and less domestic demand 874 95% of India's software
sector, primarily software outsourcing, is exported. Because the software business cannot
exist without a certain environment, its development is reliant on the nation's economic
situation. According to data from the UN's Cultural Development Report, India's culture
development index reached 0.446 in 1995, although it still only ranks 139th out of 174
nations. With a population of over 1 billion and an agricultural economy, India is an
agricultural nation with about 30 million people living in poverty. A flawed system of
equipment manufacturing, unfinished departments, and small-scale businesses are unable to
expand the domestic market or offer value-added services. As a result, the Indian software
industry lacks a stable domestic market. 4

India mainly lacks hardware production, and its information economy is organised in an
irrational manner. For instance, because there is no IC manufacturing industry in India, all
chips are imported[8]. It is bad for Indian software to develop over the long term without the
assistance of domestic hardware companies since hardware is the carrier of software and the
relationship between software and hardware is interdependent. Both hardware and software
development can benefit from one another. The Director of the Commercial Economics
Department of the Indian Embassy said, "China has a great strength in hardware manufacture,
whereas India takes advantage in software, such complement is aimed to improve bilateral
development." 3.2.3 Lack of Infrastructure Even in New Delhi, there are no huge department
stores or supermarkets, India's communication system is substantially less advanced than
China's, the country's drinking water is of poor quality, and many visitors bring water into the
country with them.

There were at least 10 power outages when a study group from China visited a sizable
software company with 9,500 employees. There are three different types of economies,
4
Sinha, S., & Sinha, S. (2019). Weaknesses in Indian Software Industry: An Analysis of Factors Affecting
Competitiveness. Journal of Business and Management, 21(4), 1-16.

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according to the Indian minister of finance: an information economy powered by technology,
an outdated economy represented by an oxcart and tile, and an old economy represented by
puddles and tile. Without a doubt, the aforementioned issues impede the expansion of the
Indian software industry.

OPPORTUNITIES

Fast expansion of the software industry worldwide The foundation of the industry is
information-based software. One of the key economic pillars has been the growth of the
software sector. According to IDG, the computer information business will be dominated by
the software service sector in the twenty-first century and expand at a quick 7 percent annual
rate. Also, Microsoft's economic history success has shown the potential of software. Due to
their huge industrial base and significant financial investment, industrialised nations actually
have an advantage in hardware. But, because the software sector relies on human ability and
requires less funding and production capacity, it gives developing nations with weak
industrial bases and economic foundations the chance to grow quickly. India has the
opportunity to earn $3 billion by fixing the Millennium Bug. 5

Location, time period, and culture Each nation has its own cultural traditions, and it might be
difficult to understand and blend inner cultural knowledge. India receives a legacy from the
200 years of British colonial rule in the form of English, which is now the official language
and the language of commerce and higher learning. Today, English is a tool used in software
development, and India makes a mistake on the right side of the sentence. Indians have few
impediments to utilising software built in accordance with the western developing country
model, and long-term colonial rule has made upper-class people more receptive to absorbing
western notions. Due to both their trust in India and its participation in the Commonwealth of
Nations, India also has a distinct advantage with western countries. For example, Americans
employ Indians to conduct market research on the Chinese market. Also, there is a 12-hour
time difference between India and America, which suggests that communications technology
has enabled the fabled "24-hour economy." 6

Market diversification and internationalisation for software services Software services are
now available internationally and are not just restricted to the mainland thanks to annual
5
Kapoor, S., & Chandra, A. (2020). Emerging Opportunities in Indian Software Industry: A Study on Industry
Growth Drivers. Journal of Business and Management Research, 4(1), 1-12.
6
Bhatt, P., & Mehta, N. (2020). Opportunities in Indian Software Industry: Trends and Outlook. Journal of
Global Information Technology Management, 23(1), 42-55.

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reductions in the tariff wall. On the other hand, the software industry is diversifying into new
markets, such as consulting. According to IDC's statistical analysis, the global market for IT
services is estimated to be $700 billion, with consulting services accounting for half of that
market. Long-term partnerships offer ongoing support. India has many opportunities in this
area.

THREATS

Political settings are unstable due to internal racial and religious conflicts as well as the high
political and military tensions between India and Pakistan. Some people from the
international investment and software outsourcing region are hesitant due to unstable
conditions. Since gaining its independence, India has been preoccupied with its internal racial
issues, and incidents of widespread conflict and societal violence continue to occur.
Horizontal competition Israel's software exports in 2000 were worth $2.5 billion, while
Ireland's were worth $8.5 billion. The combined population of these two nations is fewer than
10 million. 7

Further challenging India is the software sector in Korea, Taiwan, and the Philippines. 3.4.3
The environment of science and technology The software sector is experiencing rapid
transformation, and Indian software exports do not involve the sale of goods or intellectual
property but rather labour services. The majority of software products are still protected by
American corporations' intellectual property, which is processed mostly by Indian companies
for American software firms. Academician Ni Guangnan believed that the India Mode has a
clear vulnerability.8

First off, the software business has a poor output value per capital.

Second, there is intense competition in the market, which makes profit unstable.

Lastly, developing a fully independent software system is challenging. In Bangalore, the cost
of software service is actually $20 to $25 per hour, down from $25 to $30 per hour two years
ago[9].

7
Acharya, A. (2018). Threats to Indian Software Industry: An Analysis. International Journal of Engineering and
Management Research, 8(1), 42-47.
8
Singh, N. (2018). Threats to Indian Software Industry in the Era of Globalization: An Analysis. International
Journal of Applied Business and Economic Research, 16(2), 255-270.

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 MICRO ANALYSIS

The Indian software industry is a rapidly growing sector that has gained worldwide
recognition for its contribution to the global technology ecosystem. A micro analysis of the
Indian software industry would focus on the internal factors that affect its growth, such as the
industry structure, competition, and innovation.

Industry Structure:

The Indian software industry is dominated by a few large players such as Tata Consultancy
Services (TCS), Infosys, and Wipro. These companies have a significant market share and
employ a large workforce. However, there are also many smaller firms that specialize in
specific areas such as niche software development or consulting.9

Competition:

The Indian software industry is highly competitive with companies competing on price,
quality, and innovation. The large companies have an advantage in terms of resources and
scale, but smaller firms can compete by being more agile and focused on specific areas of
expertise.

Innovation:

The Indian software industry has been driven by innovation, with companies investing
heavily in research and development to stay competitive. The industry has seen a shift
towards emerging technologies such as artificial intelligence, machine learning, and
blockchain. However, there is still a need for more investment in research and development
to stay ahead of global competition.

Other factors that impact the Indian software industry include government policies, talent
availability, and infrastructure. The Indian government has been supportive of the industry by
providing tax incentives and creating a favorable regulatory environment. Talent availability
is a key factor, with India producing a large number of skilled engineers and software
professionals each year. However, there is still a need for more investment in education and

9
Chakrabarti, A. (2018). Micro Analysis of Indian Software Industry: A Study of Firm-Level Data. Economic and
Political Weekly, 53(40), 41-48

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training to meet the growing demand for talent. Infrastructure, particularly digital
infrastructure, is also critical for the growth of the industry, with companies requiring high-
speed internet, reliable power supply, and state-of-the-art data centers to operate efficiently.10

Overall, the Indian software industry has shown tremendous growth and potential, but there
are still challenges that need to be addressed to sustain this growth. Investment in innovation,
talent development, and infrastructure will be key to maintaining India's position as a global
leader in the software industry

MACRO ANALYSIS

The software industry is a rapidly growing and highly dynamic sector that plays a crucial role
in the global economy. A macro analysis of the software industry involves examining the
broader trends and factors that shape the industry's growth, performance, and outlook. Here
are some key macro factors that influence the software industry:

Economic Factors: Economic factors such as GDP growth, inflation, and interest rates play a
significant role in the software industry's growth. A strong economy can lead to increased
investment in software development, higher consumer spending on software products, and a
greater demand for software-based services.11

Technological Developments: The software sector is heavily reliant on innovation and

technology. Technology advancements like blockchain, cloud computing, and artificial
intelligence are influencing the industry's growth and future.

Regulatory Environment: The software sector may be significantly impacted by regulatory

frameworks and regulations. Among the various elements that influence the regulatory
environment of the sector are intellectual property laws, data privacy legislation, and
cybersecurity requirements.

10
Kumar, N. (2017). Micro Analysis of Indian Software Industry: An Empirical Study of Firm Level Performance.
International Journal of Innovation and Economic Development, 3(1), 45-64
11
Kumar, N. (2017). Micro Analysis of Indian Software Industry. Journal of Entrepreneurship, Management and
Innovation, 13(2), 63-89.

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Globalization: Businesses in the software sector operate internationally and provide services
to clients in numerous nations. New markets have emerged as a result of globalisation, which
has also boosted competitiveness and given businesses access to a larger talent pool.

Competitive Landscape: The software industry is highly competitive, with a diverse range of
players competing for market share. Competition can come from established players, startups,
and even non-traditional players like tech giants and big corporations entering the industry.12

Demographics: The demographics of the workforce and consumer base are also important
macro factors that influence the software industry. For example, as the population ages, there
may be an increased demand for healthcare software and technology solutions.

Overall, a macro analysis of the software industry requires a deep understanding of the
broader trends and factors that shape the industry's growth and outlook. By examining these
factors, stakeholders can gain valuable insights into the industry's direction and identify
opportunities for growth and investment

PUBLIC FINANCE ASPECT OF INDIAN SOFTWARE

INDUSTRY

The Indian software industry has become a major player in the global market in recent years,
with many multinational companies outsourcing their software development projects to India.
The public finance aspect of the Indian software industry refers to the various taxes,
subsidies, and other forms of government support that affect the industry.One of the key
factors driving the growth of the Indian software industry has been government policies that
support the development of the industry. The Indian government has implemented a number
of policies aimed at promoting the growth of the software industry, including tax incentives,
subsidies, and investment in education and training.13

One of the most significant tax incentives offered to the software industry in India is the
Software Technology Parks of India (STPI) scheme. Under this scheme, software companies

12
Ravindran, S., & Iyer, K. C. (2018). Micro Analysis of Indian Software Industry. International Journal of Pure
and Applied Mathematics, 119(12), 2997-3004
13
Software Exports, FDI and Economic Growth: A Study of the Indian IT Industry" by Sanjaya Kumar Lenka, published in
the International Journal of Economics and Business Research (2018). Available at:
https://www.inderscienceonline.com/doi/abs/10.1504/IJEBR.2018.090708

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are exempted from paying taxes on their export earnings for a period of 10 years. This has
been a major factor in attracting foreign investment to the Indian software industry.14

The Indian government has also provided subsidies to software companies for research and
development activities. This has helped to increase the level of innovation in the industry and
has made Indian software companies more competitive in the global market.

Another important aspect of public finance in the Indian software industry is education and
training. The Indian government has invested heavily in developing the education and
training infrastructure necessary to support the growth of the industry. This includes the
establishment of specialized institutions such as the Indian Institutes of Technology (IITs)
and the Indian Institutes of Management (IIMs), as well as initiatives aimed at improving the
quality of primary and secondary education.15

The Indian government has also put in place policies aimed at enhancing the nation's general
business environment in addition to these actions. These includes actions intended to lessen
bureaucratic red tape, enhance infrastructure, and broaden financial access.

Overall, the Indian software industry's public finance component has been crucial to its
development and success. The Indian government has taken the initiative to implement
policies that are meant to encourage the industry's expansion, and these policies have
improved the industry's competitiveness in the international market.

14
A Study of Taxation and Investment in the Indian Software Industry" by D.M. Nanjundappa and N. Jayaramappa,
published in the International Journal of Economics and Finance (2013). Available at:
https://www.ccsenet.org/journal/index.php/ijef/article/view/26207
15
"Software Industry and its Role in Indian Economy" by Pallavi Choudhury and Rahul Mishra, published in the
International Journal of Applied Engineering Research (2015). Available at:
http://www.ripublication.com/ijaer15/ijaerv10n37_62.pdf

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 INTERNATION ASPECT OF INDIAN SOFTWARE
INDUSTRY

The Indian software industry has a significant international presence and plays a vital role in
the global economy. Here are some key international aspects of the Indian software industry:

Export of software and services: The Indian software industry is primarily export-oriented
and earns a substantial amount of foreign exchange through the export of software and
services. The industry has been able to build a strong global presence, with a large number of
companies providing software development and IT services to clients worldwide.16

Outsourcing: India has become a hub for outsourcing IT services, with many global
companies choosing to outsource their software development and IT requirements to Indian
companies. This has been driven by the availability of skilled and cost-effective talent in
India.17

Industry that is heavily focused on exports: The Indian software sector is heavily focused on
exports, with a sizeable portion of its revenue coming from exports to nations throughout the
globe, notably the United States, Europe, and the Asia-Pacific area.

Indian companies are becoming a leading source of offshore outsourcing for software
development and related services including system integration, IT consulting, and software
maintenance. This has been made possible by a number of elements including a big pool of
qualified IT specialists, affordable labour, and a supportive business environment.

Worldwide competitiveness: Indian software companies are well-known for providing high-
caliber services at reasonable pricing. As a result, numerous multinational corporations and
governments around the world have awarded significant outsourcing contracts to Indian
businesses.

Investment from foreign companies: Many global technology companies, including

Microsoft, IBM, and Oracle, have set up development centers in India to tap into the

16
Export competitiveness of the Indian IT industry: The role of innovation and intellectual property" by Amit Shovon Ray
and Rahul Thakurta, published in the Journal of Asian Economics (2018). Available at:
https://www.sciencedirect.com/science/article/pii/S1049007817300585
17
Software Exports and the Indian Economy: An Empirical Analysis" by K. Narayanan and N.S. Siddharthan, published in
the Journal of Development Studies (2004). Available at:
https://www.tandfonline.com/doi/abs/10.1080/00220380410001678613

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country's talent pool and take advantage of the cost benefits of outsourcing. This has led to
increased foreign investment in the Indian software industry.18

Participation in international standards organisations: The World Wide Web Consortium

(W3C), the Object Management Group (OMG), and the Institute of Electrical and Electronics
Engineers are just a few of the international standards organisations that Indian software
companies and industry associations actively participate in (IEEE). Due to this, Indian
software companies are now better able to stay abreast of technical advancements and make a
positive impact on the global software market.

Partnership with international firms: In hopes of providing services to its customers, Indian
software firms have worked with overseas firms. Due to this, partnerships and joint ventures
between Indian and foreign companies have been formed.

Purchase of foreign firms: In order to increase their worldwide reach and obtain access to
new markets and technology, Indian software firms have also purchased overseas firms. This
has aided Indian businesses in developing their capacities and maintaining their
competitiveness on the international market.

Participation in international forums: Indian software companies participate in international

forums to showcase their capabilities and build relationships with global clients. For example,
the National Association of Software and Services Companies (NASSCOM) represents the
Indian software industry at various international forums and conferences.19

Overall, the Indian software industry has a strong international presence and has been able to
leverage its strengths to become a major player in the global software and IT services market.

18
The Globalization of the Indian Software Industry: Implications for Trade and Industrial Policy" by Dieter Ernst,
published in the Journal of Industry, Competition and Trade (2007). Available at:
https://link.springer.com/article/10.1007/s10842-007-0017-1
19
"India's Software Industry in the Global Software Economy" by N. Vijayashanker and Richard Heeks, published in the
Journal of Information Technology (1999). Available at: https://link.springer.com/article/10.1057/jit.1999.15

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 LEGAL ASPECT

The Indian software industry is regulated by various legal provisions that govern its
operation, including intellectual property rights, taxation, and labor laws. Here are some key
legal aspects of the Indian software industry:

Intellectual Property Rights (IPR): The Indian software industry is protected by the Indian
Patent Act, 1970, and the Copyright Act, 1957. These laws provide protection to software
products, computer programs, and databases created by software companies. Software
companies can also apply for patents and trademarks to protect their inventions and brand
names.20

Cybercrime: With the rise of digital technology, the Indian software industry is increasingly
vulnerable to cybercrime. Indian laws such as the Information Technology Act, 2000, aim to
address cybercrime by providing legal recognition for electronic documents and penalties for
cyber offenses.21

Data Protection: The Indian software industry is also governed by the Information
Technology (IT) Act, 2000, which provides legal recognition to electronic documents and
digital signatures. The act also includes provisions for data protection and cybercrime
prevention.22

Taxation: The Indian software industry is subject to various taxes such as corporate tax,
service tax, and value-added tax (VAT). The government of India provides various tax
benefits and incentives to encourage the growth of the software industry in the country.

Labor Laws: The software industry in India is subject to various labor laws, including the
Industrial Disputes Act, 1947, and the Factories Act, 1948. These laws regulate issues related
to employment, working conditions, and social security benefits.23

20
Legal Issues in the Indian IT Industry: An Overview" by Nivedita Narsapuram, published in the Journal of International
Commercial Law and Technology (2008). Available at: https://www.jiclt.com/index.php/jiclt/article/view/59
21
"Legal Environment for the Software Industry in India" by Vijay Kumar Singh and Pradeep Kumar Mishra, published in
the International Journal of Business and Management Invention (2016). Available at:
https://www.ijbmi.org/papers/Vol(5)11/Version-1/D0511010813.pdf
22
"Intellectual Property Rights in the Indian Software Industry: An Overview" by Mita Karmakar, published in
the Journal of Intellectual Property Rights (2017). Available at:
https://nopr.niscair.res.in/handle/123456789/42743
23
"Legal and Regulatory Framework for Cyber Security in India" by S. Sridhar, published in the International Journal of
Cyber Criminology (2015). Available at: https://cybercrimejournal.com/legal-and-regulatory-framework-for-cyber-security-
in-india/

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Overall, the legal framework in India provides adequate protection and support to the
software industry, allowing it to thrive and contribute significantly to the country's economy.

CONCLUSION AND SUGGESTION

In recent times, the proportion of hardware to software is changing. Hardware used to be in

charge, but software now does. Software, which is currently emerging and growing at the
highest rate, will be the primary industry in the IT sector. This is what a credible organisation
predicts. Bill Gates believes that the software industry will continue to grow indefinitely.
Since the software industry is expanding slowly, we must pay close attention to it. According
to a New York Times article, our strategy of fostering the software industry and offering
competitive wages can reduce the cost of software development by 20%. In the next five to
ten years, China is expected to surpass India as the second-largest exporter of software. When
he visited China, Bill Gates projected that the country's software industry would overtake
India in five years. In conclusion, we might be able to profit a little from and exploit the
challenges and dangers the Indian software industry faces. We will surely bring about the
fulfilment of prophesy if we take advantage of opportunities and completely utilise our
comparative advantages.

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 BIBILOGRAPHY

1.www.wikipedia.com

2. jstore

3.archieve.org

4. https://www.ijbmi.org/papers/vol(5)11/version-1/d0511010813.pdf

5.the hindu

6. International Journal of Engineering and Management Research

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