Starting with Indian economic liberalization in the 1980s, India today now boasts a proud, high-technology exporting industry. Expediting India’s economic growth, including the tech industry, were the 1991 market reforms. These reforms deregulated industry, implemented tariff reforms, removed import licensing on capital goods, and liberalized trade services. However, many academics attempt to downplay the effects of these reforms, both from 1991 as well as in the 80’s. In Arvind Panagariya’s The Triumph of India’s Market Reforms, he rebuts these claims and traces India’s current economic stability and past decade of continued growth to these strategic reforms.
Today, this high-tech industry contributes to India’s continuous annual growth of around 8.5% since 2003. As Swaminathan Aiyar of the CATO Institute said, these economic policies are not ideologically driven. These same policies, first implemented in the late 1980s, have been kept in place despite a change of the party in power. He calls India’s liberalization “pragmatic”.
Within India’s high-tech exports, there has been a 109% growth. The Indian technology industry largely focuses on software. They write codes and operating systems for large companies. Many starts-ups in India would have at one time have been startups in the United States. There are many reasons for this. First, India as an emerging market can compete with well-established firms like Google and Microsoft. Second, immigration issues in the U. S. can help create start-ups abroad. For example, Kunal chose the U.S. as his primary choice for the location of his business venture but due to his H-1B visa expiration, he was forced to return to his native India. Four hundred jobs later, he has created a powerful business. It has been described as the “Amazon.com of India.” Vivek Wadhwa, a visiting scholar at Berkeley, also says the U. S. is “experiencing a brain-drain.” For immigrants, better opportunities lay outside of the United States.
Two factors contributing to India’s growth are the readily available pool of workers and lower costs for businesses. For instance, Rajiv Kumar, a current Microsoft employee arrived in the U.S. from India. He worked for years for Microsoft-USA. He now “leads a team at Microsoft’s outpost in a new frontier of software — a string of high-tech boomtowns across south India.” His family moved back to India, where he started. Microsoft operates seven facilities across India.
Many U. S. multinational corporations, like Microsoft, expand their business to India, contributing to the latter country’s explosive growth.
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