Table of Contents: India’s New IT Policy
Introduction
As the global digital economy continues to evolve at breakneck speed, India is positioning itself to lead the charge with the upcoming National IT Policy, which is expected to be finalized and rolled out by the end of this year. This highly anticipated policy will replace the outdated National Policy on Information Technology (NPIT 2012) and promises to usher in a new era of technological innovation, employment generation, and economic growth.
India’s technology sector has seen unprecedented growth over the last decade, making it one of the leading players in the global IT landscape. With the increasing importance of Global Capability Centers (GCCs) and the rising role of Engineering Research and Development (ER&D), the new policy is expected to emphasize scaling up IT exports, promoting job creation, and fostering a skilled workforce for the future.
The Indian government, through industry-wide consultations and stakeholder engagements, is meticulously crafting a policy that promises to fuel economic growth and position India as a global leader in technology innovation. Here’s a deep dive into the key aspects of this game-changing IT policy, its objectives, and its potential impact on the nation’s economic future.
The Importance of Updating India’s IT Policy
The National Policy on Information Technology 2012 laid the foundation for India’s rise in the global IT sector. However, over a decade later, both the industry and the technological landscape have evolved significantly. With the growing importance of artificial intelligence (AI), machine learning (ML), blockchain, and cloud computing, India needs a policy that is agile and future-focused to keep up with these global shifts.
The IT policy being developed will address this need by focusing on:
- Strengthening Global Capability Centers (GCCs)
- Enhancing Engineering Research & Development (ER&D)
- Job creation and skilling of the workforce
- Promoting tech startups
- Increasing IT exports
By aligning its objectives with the dynamic shifts in the global economy, this policy is expected to position India as a global leader in IT and digital transformation.
Strengthening Global Capability Centers (GCCs)
One of the new policy’s primary objectives is strengthening Global Capability Centers (GCCs). These centers, previously known as Global In-house Centers (GICs), have played a crucial role in India’s ascent as a major player in the IT industry.
GCCs represent captive units set up by multinational corporations to manage specific aspects of their global operations, ranging from business process management to R&D. India, with its vast pool of skilled professionals and relatively low operational costs, has become a hub for these centers. The new IT policy aims to further strengthen this sector by:
- Providing a conducive regulatory environment: The policy is expected to create favorable conditions that encourage global companies to establish or expand their GCC operations in India.
- Fostering innovation and research: By aligning the goals of R&D with the operations of GCCs, the government seeks to promote innovation-driven development.
- Scaling up high-end service exports: The new policy will focus on exporting high-end services from GCCs, such as AI development, advanced analytics, and cybersecurity solutions, thereby increasing India’s competitiveness in the global tech economy.
Boosting Engineering Research & Development (ER&D)
Another key pillar of the new policy will be an increased focus on Engineering Research and Development (ER&D). With technology innovations being at the heart of digital transformation, the government plans to foster an environment where engineering and research activities thrive. India has already made its mark in the IT services sector, but to truly lead the digital future, the country must ramp up efforts in product innovation and technology research.
ER&D can be a major catalyst in this endeavor, particularly when it comes to cutting-edge fields like:
- Artificial Intelligence (AI)
- Machine Learning (ML)
- Quantum Computing
- Blockchain Technology
- 5G and IoT (Internet of Things)
The new policy will encourage companies to focus more on innovation and intellectual property development. By promoting investment in R&D, India could see a significant increase in the development of new technologies, ultimately driving long-term growth in its IT sector.
Job Creation and Workforce Skilling
Employment generation is a major goal of the new IT policy. As technology evolves, the demand for skilled professionals in areas such as data science, cloud computing, and cybersecurity is growing exponentially. However, there remains a shortage of qualified talent to meet these demands.
To address this gap, the government’s IT policy will place significant emphasis on skilling the workforce. This includes:
- Targeted training programs: Upskilling and reskilling programs will be introduced to ensure the current workforce remains competitive. Training initiatives will focus on new-age technologies like AI, ML, and cybersecurity.
- Partnerships with educational institutions: The government will also partner with top educational institutions and private tech firms to develop industry-relevant curricula. This will ensure that fresh graduates entering the workforce are equipped with the necessary skills to succeed.
- Creating employment opportunities for youth: With a growing population, creating job opportunities for India’s young and dynamic workforce is essential. By focusing on job creation in IT and technology-related fields, the new policy is expected to create thousands of jobs over the next 3 to 5 years.
Promoting Tech Startups
Another major thrust of the new IT policy is its support for tech startups. Over the past decade, India’s startup ecosystem has flourished, especially in the tech domain. Cities like Bengaluru, Hyderabad, and Chennai have become hotspots for entrepreneurship and startup incubation.
The government understands that startups are pivotal to the future of the digital economy. By promoting a culture of innovation and entrepreneurship, India can position itself as a hub for disruptive technologies. To this end, the new policy will:
- Offer financial incentives: The government is likely to introduce financial incentives for startups, such as tax breaks, subsidies, and grant opportunities to encourage the development of new tech solutions.
- Provide access to funding: Startups often struggle with access to capital. The new policy is expected to facilitate easier access to funding, particularly through government-backed venture funds and angel investor networks.
- Foster a startup-friendly ecosystem: By simplifying the process of setting up a business, reducing regulatory burdens, and offering mentorship programs, the government will foster an ecosystem where innovation and entrepreneurship can thrive.
Increasing IT Exports: A Focus on Global Markets
India has long been a global leader in IT exports, and the new policy aims to strengthen this position further. The focus will be on defining short-term targets for increasing the export of IT products and services over the next 3 to 5 years.
The government understands that the global IT landscape is rapidly changing, and to stay competitive, it must set clear goals for increasing IT exports. These goals will include:
- Expanding into new markets: India has traditionally relied on North America and Europe for its IT exports. However, the new policy will encourage companies to explore new markets, particularly in regions like Africa, Southeast Asia, and Latin America.
- Diversifying services: While outsourcing and BPO (Business Process Outsourcing) services have been a major contributor to India’s IT export economy, there is a growing need to diversify into more high-value services such as AI development, big data analytics, and cloud-based solutions.
What’s Next? The Road Ahead
According to sources, the formal presentation of the draft IT policy is expected by the end of October or early November 2024. Industry-wide consultations have already been carried out across major IT hubs in cities like Bengaluru, Hyderabad, Chennai, Pune, and Bhubaneswar.
More than 100 companies, including top IT service firms and several startups, have participated in these consultations, contributing valuable insights to shape the policy.
Startups are a key component of this policy, with discussions still ongoing about how to incorporate their unique needs and challenges into the framework. Once finalized, this policy is expected to set the stage for a tech-driven revolution in India, boosting exports, jobs, and innovation.
Conclusion
India’s upcoming National IT Policy is not just a refresh but a strategic overhaul aimed at aligning the country with the global digital transformation. From strengthening GCCs and boosting R&D to job creation and promoting startups, this policy is set to position India as a global leader in technology.
By fostering an environment that encourages innovation, skilling, and exports, the Indian government
