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Global Development Institute

The Uneven Profile of Indian Software Exports

Richard Heeks

Abstract

Indian software exports have shown very high growth rates for many years. Yet, behind this success lie a number of skews. These skews are discussed in this paper, which is based on fieldwork and secondary surveys conducted in India over the past ten years. In particular, software exports have been epitomised by the export of programmers who go to work for a client in the US: so-called 'body shopping'. Software exports have also been dominated by large firms located in a few metropolitan areas, notably in Bangalore.

The paper discusses each one of these skews; presents analysis that explains why they exist and persist; and, looking especially at growth in offshore working, why they may change. Conclusions are drawn about the benefits, costs and likely trajectory of the current uneven profile of Indian software exports.

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Educator's guide

Synopsis questions

  1. Summarise the current status of Indian software exports. [all parts]
  2. Review the Indian software industry's export skews. What is bad for the industry about these skews? What is good for the industry about these skews? Why to these skews occur? [all parts]
  3. What is 'international division of labour'? Describe the international division of labour in Indian software exports. [part C]

Development questions

  1. Would you advise developing country governments to try to develop their software industry or not? If you would advise development, would you advise them to target software exports or the domestic market? If you would not advise development, what would you advise as an alternative use of resources?
  2. Make recommendations on future action for:
    • a typical Indian software exporting company;
    • the Indian government.
  3. What will the profile of Indian software exports be in 10 years' time?