India@75: Looking Back on the Country’s Evolving Tech Landscape
In the last 75 years, India as a nation has taken giant strides when it comes to technology and innovation. One cannot deny that the history of India’s computing technology in India is largely dependent on the political climate (determined by the political party in power) driven by technocrats and government policies. And while the Government of India from time to time introduced various policies and measures to encourage the growth of the computer/IT industry, visionaries and experts from the private sector too have a huge contribution to India’s tech revolution.
Today, the Indian IT industry continues to be at the forefront of the country’s development. As the country celebrates 75 years of its independence, we take a look at some of the biggest tech milestones of independent India.
The Early Days
Pandit Jawaharlal Nehru, India’s first Prime Minister, is credited with creating and nurturing institutes of national importance. The Indian Statistical Institute (ISI) Kolkata, founded by P.C Mahalanobis in 1931 and Tata Institute of Fundamental Research (TIFR) Mumbai, founded in 1945 at the initiative of Dr. Homi Jehanger Bhabha, in fact heralded India’s entry into the world of computation.
Both the scientists had deep professional rivalry, yet, in their own ways they realized the importance of computers in scientific research and statistical calculations.
Led by Mahalanobis, the team at ISI, comprising scientists and engineers, built one of the first mechanical calculators and analog computers to solve mathematical problems. ISI was also the first organization in the country to get a computer in 1956. During the 1960s, Mahalanobis set up the Bangalore Centre of the Indian Statistical Institute, when the city was emerging as a center of science and technology innovation.
The TIFRAC (Tata Institute of Fundamental Research Automatic Calculator), a first-generation main-frame computer developed for scientific computations, was commissioned on February 22, 1960, at the TIFR, Mumbai, making India the first country in Asia and Japan to have built such a machine. The TIFRAC project was headed by R Narasimhan who then went to the University of Illinois in 1961 and did pioneering research in picture processing.
In the mid-1960s, TIFR soon realized that commercial companies were surging ahead in designing computers and it was prudent to buy rather than build a computer for use by researchers in India. A committee headed by Narasimhan evaluated various machines and selected the CDC 3600‐160A, a computer manufactured by the Control Data Corporation, USA, as an appropriate computer for scientific computing at the TIFR.
It was a bold decision as CDC 3600 was not yet a commonly used computer during mid-1960s. The system was bought for USD 1.5 million with funds provided by the United States Agency for International Development (USAID). Homi Bhabha was able to convince the Government of India to arrange for the funding. It was installed at the TIFR in mid 1964. It was the first high performance machine installed in India and was one of the best computers of its generation.
TIFR sent engineers for training to CDC in the USA to maintain the machine. CDC assisted in installation and early maintenance but later maintenance was done in‐house by TIFR. Over 150 institutions from all over India used it effectively for numerous large scale number crunching problems for more than a decade.
Another computer installed in India in August 1963 at the Indian Institute of Technology, Kanpur (IITK) was an IBM 1620. It was the first computer with a FORTRAN compiler to be installed in an educational institution in India. The IBM 1620 was imported with financial assistance of the United States Agency for International Development (USAID) which channeled the funding through the Kanpur Indo‐American Program (KIAP), a consortium of nine major US Universities which assisted establishment of the IIT at Kanpur by sending visiting faculty members and by assisting in the purchase of equipment.
The first commercial computer to be installed in India was an IBM 1401 at ESSO Standard Eastern Inc., an oil marketing company in Mumbai. Between 1961 and 1964, over 12 computers were installed in Research and Development organizations and two in educational institutions.
Meanwhile, in late 1960s, the Electronics Corporation of India Limited (ECIL) was set up to enhance technologies of electronics. Led by A. S. Rao in Hyderabad, to create a strong indigenous base in electronics, ECIL focused on indigenous nuclear energy, space and Defence sectors. Between 1971 and 1978, ECIL made 98 computers that were sold in government libraries and different universities for research.
By 1970 the IBM 1401 was the most popular computer in India with 80 installations. The annual rental charged for a high end 1401 (i.e., one with 4 tapes and 2 disks) was around Rs. 850000 (USD 190,000 at the prevailing exchange rate). To the credit of IBM’s service was excellent and it recruited and trained very good technical and sales persons. A whole generation of maintenance engineers and programmers were trained and nurtured by IBM.
IBM 1401s were everywhere. Indian Railways had over a dozen of those machines, most Tata group companies and textile giants were also using IBM 1401, including the first computer at the Tata Consultancy Services (TCS). Tata started TCS in 1968 because a need was felt to centralize data processing for various Tata companies. TCS was started with just 3 computers.
IBM enjoyed absolute monopoly from 1950 to 1977 before deciding to exit India in 1977. However, it was becoming increasingly difficult for them (and several other MNCs) to operate effectively because of the Foreign Exchange Regulation Act (FERA), which had come into effect in 1974. Under FERA, the country placed a cap on foreign equity participation at 40%. All companies with more than 40% foreign equity had to obtain fresh approval from the Reserve Bank of India (RBI) to continue their operations. Clearly, this was not acceptable to IBM.
And even though IBM was found guilty of wrongdoings such as dumping obsolete computers in India at inflated prices, it did create a ‘computer culture’ in the country and gave India her first generation of programmers and computer engineers.
Effort was underway to put computers on a network. The National Centre for Software Development and Computing Techniques (NCSDCT), carved out from TIFR, was first to demonstrate Wide Area Network (WAN) when it linked computers at TIFR using Bombay Telephone lines in 1977.
Birth of HCL, Infosys, Wipro
IBM exits India, opening up the sector to private domestic companies like Wipro and HCL with the government announcing a minicomputer policy. The policy encouraged technology companies to set up their computing and software manufacturing facilities in India
In 1971 Delhi Cotton Mill (DCM) created a new line of business to venture into emerging areas such as electronics. Shiv Nadar and Arjun Malhotra formed the core team of this new group. The first indigenous calculator that DCM built in 1972 was as large as a briefcase. 1975 DCM launched India’s first microprocessor. Next year, the core team at DCM started Hindustan Computers Limited or HCL under the leadership of Shiv Nadar. The brand name HCL came into being after a joint venture with Uttar Pradesh Electronics Corporation Limited who provided the much needed capital to kickstart the company.
With IBM leaving India, HCL stepped up to fill the vacuum. HCL 8C built in 1977 was in many way India’s first modern PC, and was released at the same time as Apple in the US. It had an 8 bit microprocessor with operating system (OS) written in Business BASIC. It came with a 5.25 inch floppy drive and could maintain data and computations even if computer had to be restarted because of power cut.
HCL had a great run, but when imports were liberalized in mid-1980s, a number of companies started assembling PCs from imported kits. HCL and other homegrown hardware companies felt the heat and were forced to get into software services. HCL America which had started as a hardware company in US in 1988 soon morphed into a services company. HCL offered to get the work done at customer’s company premises, called ‘onsite’ work, or work could be shipped to India office, called ‘offsite’ work. This is how Indian companies discovered their model of outsourcing!
Down South in Bangalore, WIPRO or Western India Palm Refined Oil Limited’s next generation leaders ventured into the business of building minicomputer and microcomputers to fill the gap created by IBM’s exit. Wipro’s first computer Wipro86 launched in 1981 was built using modular hardware. Wipro leaders considered themselves as ‘mini IBM’ and had licensing partnerships with Intel, IBM and Sun Microsystems.
However, as with HCL, Wipro’s hardware businesses too took a beating in the late 1980s, as it could not compete with multi-nations in software products. Much like HCL, Wipro ventured into consulting services and devised the concept of “Lab on Hire” to leverage the R&D talent it had assembled in India.
The story of India’s information technology cannot be complete without the story of Infosys. To trace the origin of Infosys, we have to go back to 1972 when Narendra Patni, an MIT graduate and later a consultant at Forrester came up with the idea that a low-end work of digitizing legal records could be outsourced to India. Patni founded Data Conversion Inc. (DCI) to digitize data on punch cards or magnetic tape. DCI’s business grew fast and it soon needed a computer of its own to typeset directly on computers and store data on magnetic media. Narendra Patni incorporated Patni Computers System or PCS in 1976.
Patni felt the need for a dedicated team for its software and hired N. R. Narayana Murthy, an M.Tech from IIT Kanpur to head the team. Murthy handpicked his core team and hired Narendra Nilekani, Shibulal, K. Dinesh, and Gopalakrishnan among others. PCS started winning offshore software contracts under the strong leadership of Murthy.
In 1980, in an almost repeat of what happened at DCM, Murthy quit PCS along with his lieutenants to create Infosys. In the initial years, Infosys had engineers visit onsite location to carry out projects. It took almost 4 years for Infosys to buy its first computer after procuring a loan from Karnataka State Industrial and Infrastructure Development Corporation.
1980s and India’s ICT vision
Rajiv Gandhi became the Prime Minister of India in late 1984 and is usually called the ‘Computer Man of India’. During his tenure, Gandhi brought some revolutionary policies that transformed India’s image at the global stage. His brainchild IT and Communication policy is one of them.
He endorsed the liberalized policy made on minicomputers that allow private sector companies to manufacture computers, as mentioned earlier. The domestic IT companies also manufactured assembled boards with microprocessors and interface electronics to be imported along with application software with less imported duty. Due to this, the growth of computers went up to 100% and resulted in 50% decline in cost. The farsighted initiatives of Gandhi paved way for India to become the IT superpower and made it the top preferred destination for offshore software development.
Indian born telecom engineer and entrepreneur Sam Pitroda is credited for laying the foundation of the country’s telecom industry. Pitroda began by working closely with Gandhi to establish the Center for the Development of Telematics (C-DOT). Subsequently several measures were implemented to make telephone lines available for rural and urban Indians.
Meanwhile, the computerized Indian railway’s Seat reservation system for example was started in 1984. In the seat Reservation system, the entire software was made by Indian players without any foreign aid. At the time when having a basic telephone was considered as luxury, Rajiv Gandhi had put India on the cellular network.
The Department of Electronics (DoE) commissioned – Education and Research Network (ERNET) modeled on ARPANET to connect five IITs, IISc Bangalore, NCSDCT and DoE. Shortly after, ERNET partners could connect to the world on dial-up (That’s how internet came to India in 1989). It was available only to the educational and research community, the Internet was publicly available from August 15, 1995.
The IT Boom in the 1990s
The Information Technology industry began to open up in the 1990s. The early years of the decade saw a move towards market-oriented economic policies to expand private investment in driving growth. This gave a fillip to the IT and IT-enabled services industry, which grew from $100 million in 1990 to $1 billion by 1996, and crossing over $5.7 billion in 2000 changing the course of development of this country forever.
Over time, the industry has contributed significantly to the country’s gross domestic product (GDP). The software services export market opened up lucrative opportunities. The government made some watershed decisions, including bringing in the new computer policy, which initiated liberalization of the computer industry. The Rangarajan Committee recommendations led to banking computerization. This, in turn, saw companies such as TCS, Wipro and Infosys develop banking products—a segment where Indian products would go on to be world leaders.
In 1991, the government decided to establish seven Software Technology Parks (STPs) across India and supported fledging companies in order to grow IT sector in the country. STPs played a key role in India’s IT growth story.
A pivotal moment came in 1993 when satellite link became operational at Bangalore STP. Software companies located in the park could now do video conferencing with their overseas clients and ship software over the satellite connection. Two years later, Videsh Sanchaar Nigam Limited (VSNL) – which later renamed Tata Communications Limited – launched Internet Services in 1998 as government allowed companies to set up private ISPs leading to the explosion of internet users in India.
The growth of India’s software industry through the 1990s made it the poster child for the success of the economic reforms process. India’s IT firms — Infosys, Wipro, TCS — propelled Indian industry and the economy into global view.
Another milestone development of the time was the birth of the National Association of Software and Services Companies or Nasscom. Established in 1988, Nasscom’s membership has grown over the years and it acted as a facilitator of trade between the IT and BPO industry of India. In the 1990s, Nasscom became a super power and standardized the ways of working in the Indian software companies.
Meanwhile, the industry embraced the quality movement—first with ISO 9001 and then with SEI-CMM. By 1999, 50% of the SEI-CMM Level 5 organizations in the world were from India. Indian IT majors listed on Indian and global bourses at the same time.
Indian software companies invented the Global Delivery Model (GDM) and 24-hour working hours for IT industry. From mere programming, the software professionals scaled up to top-class software development services for global clients. The thrust was on improving business performance, increasing productivity and customer experience.
Many factors seem to converge in the 1990s to present India to the IT world map. In 1991 India’s economy was liberalized and license raj came to an end. External factors such as “shortage of technical workers in the West, low labor costs in India, firm-level changes such as quality certification, transfer of knowledge and capability through linkages with US and European firms, linkages with the Indian Diaspora, and the emergence of opportunities such as Y2K” helped amplify India’s progress into global IT market.
Along with IT firms, technology startups too have contributed to the growth of the industry as they have fine-tuned their offerings to meet the demands of global clients. Every sector has integrated technology and this includes manufacturing, finance, banking, marketing, entertainment and education, among other applications. Against this background, a number of government and private-owned engineering colleges started mushrooming in various geographies across the country.
India’s Mobile Revolution
In the last two and half decades, mobile phones, have moved categories, from a luxury gadget for the rich to a ‘must-have’ device for all people. The gradual drop in voice calling rates and cheaper handset cost have accelerated mobile adoption across sections of the society.
In 1994, India gave license to private telecom players and allowed them to access the market. This move led to a mobile revolution – one which made operators suffer heavy losses as they paid about Rs 27,000 crore for license. The government later changed the fixed-license fee to a revenue-sharing system to support the operators.
In 2002, Tata Teleservices, Reliance Communications Limited and Hutchison operated on Code Division Multiple Access (CDMA) based network, a second-generation telecom standard. They introduced CDMA to reach out to the low-budget sections. In 2004, incoming calls were made free. Also, for the first time, the number of mobile phone users in India surpassed the number of landline users.
Three years later, the number of mobile users jumped to more than 5 times to 233 million, according to data from Cellular operators association of India (COAI).
Due to an increase in FDI (Foreign Direct Investment) cap to 74%, from 49%, the sector gained more financial clout that helped boost development in mobile technology and connectivity.
In 2009, Taiwanese smartphone maker HTC launched their first smartphone in India, priced at about Rs 30,000. This was followed by the entry of Chinese brands in 2014 that sold cheaper handsets to Indian consumers. The Chinese brands became more popular than homegrown brands like Micromax, Intex and Lava. At the other end of the spectrum, Apple and Samsung were selling handsets for people looking for premium gadgets.
The sector continued to see steady growth until Asia’s richest man Mukesh Ambani entered the the industry with his Reliance Jio offering in 2016. A move that disrupted the existing order.
Jio gave its subscribers free voice calls, and data at extremely low rates. The telcos ushered the 4G revolution. In an attempt to play catch up, rivals spent a lot and compromised their margins.
Mobile operators like Aircel, Telenor had to shut shop, leaving only 3 players in the industry – – Jio, Airtel and Vodafone. Jio today is the largest mobile network operator in India, followed by Airtel and Vodafone.
The sector has been since marred by legal and regulatory controversies with telcos reeling under heavy debt. For Vodafone Idea (Vi), the debt amount is 1.8 lakh crore, out of which a staggering 1.5 lakh crore has to be paid to the government, making its very existence doubtful. One may ask: Is the Indian telecom market, which once boasted of 12 players, be reduced to a duopoly? Or will the government come to the rescue of the ailing telcos. It’s a wait and watch situation.
Narendra Modi’s Digital India
The ‘Digital India’, program introduced by the present Prime Minister, Narendra Modi. This campaign initiated in July 2015, has made the country digitally empowered in the area of technology that is inclusive, affordable and sustainable.
The Digital India program is finding global resonance and has witnessed a consistent upward growth trajectory, achieving numerous milestones and flagship initiatives. These achievements cover a wide plethora of sectors and include development of broadband highways, universal access to mobile connectivity, public internet access programs, e-governance to name a few. Many major schemes and projects such as Aadhaar, Smart Cities Mission, BHIM UPI, RuPay, GSTIn, GeM (Government e-Marketplace), DigiLocker come under the aegis of the Digital India program.
The initiative includes plans to develop better digital infrastructure in rural areas and boost the existing digital economy. Since its inception the Government has been consistently scaling the Digital India initiative, they increased the outlay for the program by 23% to Rs. 3,958 crore for the year 2020-21. This increase is likely to contribute to scaling our electronic manufacturing industry, facilitating research and development and strengthening cyber security and data protection frameworks.
The program has also initiated the ambitious Bharat Net program, that undertook the task of connecting 2.5 lakh gram panchayats by fiber-optic network and has achieved around 1,40,000 connections thus far. Promoting digital inclusion is also a core component of the initiative with programs like Common Service Centres (CSCs) that enable the delivery of digital services through the internet in rural areas. The scheme also works to promote employment in rural areas in digital and allied services.
The initiative focuses on tapping into the potential of the digital startup ecosystem, as India is home to 9,300 tech-startups which makes it the third largest tech startup ecosystem in the world. A large number of these startups dabble in niche areas in technology like AI, Blockchain, analytics and cybersecurity. In order to create a conducive ecosystem the MeitY has launched program like TIDE (Technology Incubation and Development of Entrepreneurs), promotion of ESDM (Electronics System Design and Manufacturing) Skill development and the setting of incubation centers that are working to promote indigenous technology. The growth in the e-commerce market, which is estimated to be worth 200 billion U.S. dollars by 2027 from 50 billion U.S dollars in 2018, is testament to the Government’s efforts.
Very recently, the government prioritized financial freedom with initiatives like the e-RUPI that has been launched to empower beneficiaries with leak-proof, digital, cashless and streamlined access to benefits without the need for middlemen.
Indian IT – The Road Ahead
There is no doubt that the Digital India Initiative has been a huge success in its first five years with an increased focus in e-Commerce, digital skills and tech start-up ecosystem. The government has set a target of becoming a USD 5 trillion economy by 2030.
However, it is imperative that an accelerated focus is placed on certain core components such as enhancing digital literacy and accessibility to truly realize the potential of India’s digital economy. Though the Government has developed state of the art systems and schemes, it is important to ensure that these systems are prepared for interoperability across the board.
It is also important to acknowledge that the schemes and initiative under Digital India don’t operate in a vacuum, it is important to create strong legislative and administrative frameworks to facilitate the realization of this vision. There is a need for India to strengthen its cybersecurity frameworks and promote informational privacy of citizens on an urgent basis.
The Personal Data Protection Bill 2021, that is presently under consideration by the Government, is a step in this direction and will help India to protect and secure its digital interests and rights. It is also time for India to forge digital policies that are tailored made for the Indian scenario and tap into the vast treasure trove of technical competence at India’s disposal.
There’s no doubt that technology has became a crucial part of our daily lives in the socially distanced world. Industries all over adopted digitization at record speeds to cater to the changing consumer needs and to stay relevant. With the growing penetration of the internet in our country, technological advancements can reach far and wide on reduced costs.
(This is an excerpt from Techtonic Shift: A Brief History of Computing and the Web by Sohini Bagchi, Editor, CXOToday.com. The book is published by Orange Publishers and is also available on Amazon.in)