The Dilemma of Indian IT
Amit Pandey
India’s technology sector, often celebrated as a global IT powerhouse, has predominantly built its success on service-oriented models rather than groundbreaking innovations. This trend has raised concerns among industry experts and policymakers about the nation’s technological self-reliance and its aspirations to become a “Vishwaguru” or world leader in technology.
A recent development that underscores this issue is the partnership between India’s leading telecom companies, Reliance Jio and Bharti Airtel, with Elon Musk’s SpaceX to bring Starlink’s satellite internet services to India. Announced in March 2025, these collaborations aim to provide high-speed internet access, especially in remote and rural areas, leveraging Starlink’s satellite technology .
This move, however, raises critical questions about the capabilities and ambitions of Indian tech giants. Why did these companies feel the need to partner with a foreign entity like Starlink? Does this indicate an inability to develop indigenous solutions that can compete on a global scale? Such partnerships suggest a reliance on external technologies, highlighting a gap in domestic innovation.
Historically, Indian IT companies such as Tata Consultancy Services (TCS), Infosys, Wipro, HCL Technologies, and Tech Mahindra have focused primarily on IT services and outsourcing. While this strategy has driven significant economic growth, it has also led to a limited emphasis on research and development (R&D). According to the Department of Science & Technology’s Research and Development Statistics for 2019-20, the contribution of the IT sector to India’s Gross Domestic Expenditure on R&D (GERD) has been relatively low .
This risk-averse approach raises concerns about the long-term sustainability of India’s position in the global tech arena. Are these companies prioritizing short-term profits over long-term innovation? By focusing on low-risk service models, are they neglecting opportunities to invest in high-risk, high-reward research that could lead to groundbreaking technologies?
The government’s role in this scenario is also crucial. Despite providing various incentives such as tax deductions, subsidies, and policy support to promote initiatives like “Make in India,” there has been limited success in fostering indigenous technological innovation. For instance, while the “Make in India” initiative aimed to transform India into a global manufacturing hub, its impact on the IT sector’s innovation capabilities has been minimal. This raises questions about the effectiveness of such policies and the accountability of corporations benefiting from them.
The recent partnerships with Starlink have also sparked political debates. Some opposition leaders have criticized these deals, suggesting they may have geopolitical implications. For example, Congress leader Jairam Ramesh alleged that these partnerships were orchestrated to “buy peace” with the United States, given Elon Musk’s close ties with the U.S. administration. Such claims, whether substantiated or not, add another layer of complexity to the discourse on India’s technological autonomy.
Furthermore, concerns about national security have been raised. The Communist Party of India (Marxist) expressed apprehensions regarding potential security risks associated with allowing a foreign entity like Starlink to operate in India’s critical communication infrastructure These concerns highlight the delicate balance between embracing global technological advancements and safeguarding national interests.
In conclusion, the reliance on foreign technology, exemplified by the recent Starlink partnerships, underscores the need for a strategic shift in India’s tech industry. Indian IT giants must move beyond their traditional service-oriented models and invest in R&D to develop indigenous technologies. The government, on its part, should reassess its policies to ensure that incentives lead to tangible innovations. Only through such concerted efforts can India aspire to become a true “Vishwaguru” in technology, reducing dependency on external entities and enhancing its global standing.
Title 1: The Grand Illusion of Indian Tech Giants: Service Providers, Not Innovators
When Union IT Minister Ashwini Vaishnaw recently criticized Indian tech companies for being mere service providers rather than innovators, his remark resonated with those who have long questioned India’s lack of technological breakthroughs. Despite a massive IT workforce and government-backed initiatives, India remains a follower rather than a leader in the global technology sector. The question is: Why?
India’s IT boom began in the 1990s, driven by outsourcing from Western nations. Companies like Tata Consultancy Services (TCS), Infosys, Wipro, HCL Technologies, and Tech Mahindra capitalized on the demand for cost-effective software solutions. However, while global giants like Microsoft, Google, and Apple invested in research and development (R&D), Indian firms chose the safer route: service-based models that guaranteed profits but required minimal innovation. The National Association of Software and Service Companies (NASSCOM) reports exponential growth in India’s IT exports, yet the sector’s contribution to groundbreaking advancements remains negligible.
A stark comparison can be drawn with China and South Korea. Huawei has heavily invested in 5G technology, and Samsung has revolutionized semiconductor manufacturing. In contrast, Indian firms rely on government-backed schemes like “Make in India” without taking the risks necessary for pioneering technology. The government’s tax reductions, corporate bailouts, and loan write-offs have fostered complacency, ensuring these companies’ survival without demanding technological progress.
A Global Competition Crisis
Elon Musk’s Starlink recently partnered with Indian telecom giants Jio and Airtel to introduce satellite internet services. Instead of developing indigenous alternatives, Indian firms opted to act as intermediaries, further exposing their inability to compete globally. This raises a critical question: If Indian tech firms are so reliant on foreign innovation, can India ever claim to be a technological powerhouse?
Airtel and Jio collectively serve over 540 million consumers in India. With such an extensive market, why haven’t these firms invested in their own satellite-based communication networks? The answer lies in their risk-averse approach. Service-based models ensure steady revenue without the uncertainty of R&D. Developing satellite communication technology requires years of investment, strategic risk-taking, and commitment—something Indian companies systematically avoid.
This over-reliance on foreign technology is not just a business failure; it has geopolitical and security implications. A country that imports its critical communication infrastructure exposes itself to cybersecurity vulnerabilities. In 2023, the Uttarakhand government’s Integrated Management Financial System (IMFS) site was hacked due to outdated, pirated software procured at exorbitant costs. According to sources, the software was purchased by a government-appointed committee at a highly inflated price, only to later discover it was a pirated version. Even a moderately skilled hacker could breach it, yet the government accepted the purchase. When the hack occurred, why weren’t the responsible officials held accountable? Why weren’t the companies involved called for questioning? This incident exposes a nexus where officials and tech firms exploit government funds without scrutiny.
Multiple state governments face similar issues, where outdated and overpriced technology is procured, leading to massive financial losses. The Madhya Pradesh government faced a similar cybersecurity breach in 2022, yet no structural reforms followed. Without audits or penalties, companies selling faulty software continue to thrive under government contracts. This nexus between the government and corporate entities prevents India from achieving true technological self-reliance.
The Myth of “Make in India”
One of the biggest deceptions in India’s tech landscape is the illusion of “Make in India.” While the initiative was designed to encourage domestic manufacturing, it has largely resulted in India becoming an assembler rather than a manufacturer of technology. A prime example is the LED bulb industry, aggressively promoted as an energy-saving revolution. Indian companies like Philips and Surya benefited from tax cuts and subsidies, but a deeper look into the supply chain reveals a troubling reality.
In 2018, European markets rejected large shipments of LED bulbs due to quality concerns, leading these companies to dump the products into the Indian market at inflated prices. This raises serious concerns: Is India becoming a dumping ground for outdated and rejected technology from developed nations? Are Indian consumers unknowingly paying a premium for substandard products under the guise of innovation?
This culture of assembling extends beyond LED bulbs. India’s electronics industry is heavily dependent on Chinese imports, with over 80% of components used in smartphones, laptops, and other devices sourced from China. Despite government attempts to promote indigenous semiconductor manufacturing, India has made little progress in establishing a self-sufficient ecosystem. The global chip shortage further exposed India’s vulnerability, as domestic manufacturers scrambled to meet demand without the infrastructure to produce critical components.
Even in areas where India has made strides, such as space technology with ISRO, the involvement of private Indian tech companies remains minimal. Unlike SpaceX, which has revolutionized space exploration, Indian firms have shown little interest in pushing boundaries beyond government contracts.
What Must Change?
The fundamental problem lies in the lack of accountability and vision among Indian tech giants. These companies have benefitted immensely from government incentives but have failed to contribute to technological progress. To address this, the following steps must be taken immediately:
- Conditional Government Funding: Financial incentives should be tied to R&D investments. Companies must dedicate a fixed percentage of revenue to innovation.
- Public-Private Collaboration: The government must actively partner with private firms to develop indigenous alternatives in AI, semiconductors, and cybersecurity.
- Reduction in Import Dependence: India must enforce stricter policies to limit foreign technology imports unless no domestic alternatives exist.
- Corporate Accountability: IT firms must be held responsible for utilizing government benefits effectively. Companies that fail to innovate should face penalties rather than additional subsidies.
The narrative of India as a “Vishwa Guru” in technology remains political rhetoric. Without concrete action to push Indian companies toward self-reliance in innovation, India will remain a service-oriented economy rather than a technological leader. The time for complacency is over—India must shift from being a passive consumer of global technology to an active contributor to the digital future.
( Author is Managing Editor Of The Emerging World)
