“Make in India” through PPP for IT Industry: IT Independence of Indian Economy

Abstract

Asian Countries are emerging independent countries and are rapidly occupying good share in world
economy. India will be second largest economy after China in next one or two decades because of its young
population, comparatively low dependency ratio, healthy savings and investment rates. The long term
growth prospective of the Indian economy is positive due to adoption of import substitution. Due to
favorable scenario of young population and healthy savings; government of India has chosen import based
strategies to promote industrialization through “Make in India”. However possibilities for software product
development; through “Make in India” is still in infancy and have a small dot on the big canvas. India is a
major exporter of IT services; this is the fastest-growing part of the economy, which is used to maintaining
import export balance. The growth in the IT sector is based on specialization, and availability of a large pool
of low-cost, highly skilled workers matched by demand from global customers. One advantage is India's
service cost; that is, approximately 3-4 times cheaper than other countries, and it is USP (Unique Selling
Proposition) in the global market.
The efficiency of Indian IT professional is limited to software consultancy project or business process
management (BPM) services, because the private sector companies are mostly based on the business
strategy for revenues generation. They are hiring talented persons from India and providing their services to
overseas clients at a relatively cheaper rate. In the entrepreneur point of view, the service providing route
would be less risky and quicker to earn profits, than building a software product based company. A venture
capitalists perspective also advocates investing in low risk and better rewarding project and therefore, ITservice
sector is more reasonable than software development. The IT independence in India could be
reached by establishing R&D agencies through PPP under Make in India project. This paper critically
discuses factors hindering establishment of R&D labs through PPP for Software and Hardware Startup in
India. The manuscript strongly advocates the need of Research Labs under Public Private Participation