Today, India stands as a world leader in real-time digital payments, processing billions of transactions each month through its Unified Payments Interface (UPI). Its IT companies power much of the world’s software needs — from foundational systems like Aadhaar and UPI to corporate giants like Infosys and Tata Consultancy Services (TCS).

India’s technological innovations have not only reshaped its own economy but also set global benchmarks. Yet, the journey from a country with no computing industry in 1947 to a tech powerhouse was anything but accidental. It is a story of policy vision, scientific ambition and relentless enterprise.

STORY CONTINUES BELOW THIS AD1947: A nation starts from scratch

When British colonial rule ended in 1947, India inherited a battered economy. The colonial administration had largely ignored education, science, and industry. For a population of 350 million, there were only 38 engineering colleges, with just about 3,000 students enrolled in technical fields.

The transformation into a global leader in software and digital infrastructure took decades — and deliberate planning.

Laying the foundations: IITs and nation-building

The story begins in 1950 with the establishment of IIT Kharagpur, the first of the Indian Institutes of Technology. These institutes would become the nation’s top science and tech institutions. IIT Kharagpur began in August 1951 with just 10 departments, 42 teachers and 224 students — in a building that once served as a colonial detention camp, a deeply symbolic choice.

Prime Minister Jawaharlal Nehru saw science as central to rebuilding the nation. Between 1954 and 1964, four more IITs were established: IIT Bombay in 1958, IIT Madras and IIT Kanpur in 1959 and IIT Delhi in 1961.

Modelled on the Massachusetts Institute of Technology (MIT), the IITs were intended not just to produce engineers but to drive research and industrial transformation.

Building the digital future: TIFR and India’s first computer

Meanwhile, in Mumbai, the Tata Institute of Fundamental Research (TIFR) was laying the groundwork for India’s computing journey. In 1954, a six-member team led by R Narasimhan — recruited by Homi J Bhabha, the father of India’s nuclear programme — began working to build a computer, despite none of them having ever seen one.

Armed only with blueprints and determination, they worked for five years. The result was the TIFR Automatic Calculator (TIFRAC), Asia’s first indigenous digital computer. This modest but historic achievement put India on the global computing map.

1968: Corporate tech push

The first two decades were about building capacity. Then in 1968, industrialist JRD Tata had a vision: modernise the Tata Group using computers for data processing. He brought in Faqir Chand Kohli, an engineer at Tata Electric, to lead the mission.

Kohli built a team to master computer technology and automate Tata businesses, and thus Tata Consultancy Services (TCS) was born. Initially, TCS handled punch-card management and payroll systems. But Kohli believed they could serve global clients, not just domestic operations.

As Kohli put it: “Many years ago, there was an industrial revolution. We missed it for reasons beyond our control. Today, there is a new revolution — a revolution in Information Technology. If we miss this opportunity, those who follow us will not forgive us.”

From local data processing to global IT outsourcing

Kohli persuaded the Tata Group to take on international clients. In 1974, TCS signed its first major software deal with American computer manufacturer Burroughs — a landmark that sparked India’s IT outsourcing boom.

With little domestic demand for software and strict regulations, Indian firms sent engineers abroad to write code. This export-driven model, born of necessity, proved transformative.

STORY CONTINUES BELOW THIS ADProtectionism and opportunity

In 1977, protectionist policies led to the expulsion of multinationals like IBM over foreign equity rules. This vacuum created opportunities for homegrown firms, including Shiv Nadar’s HCL, which began providing computing solutions.

Policy reforms unlock growth

Two major policy shifts played a pivotal role in accelerating the rise of India’s IT industry. The first was the 1984 Computer Policy introduced under prime minister Rajiv Gandhi, which cut tariffs and removed licensing barriers for software exports. The second was the landmark 1991 economic liberalisation, which opened the Indian economy and fuelled exponential growth in software exports. As a result, Indian IT companies evolved from being perceived merely as low-cost providers to becoming trusted suppliers of high-quality, reliable services. This period also cemented the dominance of industry giants such as Infosys, Wipro and TCS, while Bengaluru emerged as the ‘Silicon Valley of the East’.

Turning tech prowess inward

Over the past decade, India has leveraged its tech expertise to solve domestic challenges. It has built nationwide digital infrastructure and launched breakthrough innovations like the Unified Payments Interface (UPI), introduced in 2016 by the Narendra Modi government.

UPI turned smartphones into banks, enabling instant payments with a simple tap. By 2025, UPI accounted for nearly 84 per cent of all digital transactions in India, making the country the world leader in real-time payments.

JAM trinity: Revolutionising financial inclusion

Equally transformative was the “JAM Trinity” — Jan Dhan bank accounts, Aadhaar unique ID and mobile connectivity. Together, these innovations revolutionised financial inclusion, particularly in rural areas.

Jan Dhan zero-balance accounts brought millions into the banking system. Aadhaar enabled biometric identity verification. Mobile connectivity linked the entire system. Direct benefit transfers eliminated leakages ensuring subsidies reached recipients without delay or corruption.

This model has been studied by Western economies and praised by the United Nations for advancing financial inclusion.

New frontier: Artificial Intelligence

India’s software services industry now generates over $245 billion annually, with $200 billion from exports — largely to clients in the US and Europe. These services include software development, maintenance and testing.

But Artificial Intelligence (AI) threatens this model. Automated tools can write code, test programmes and handle back-end operations. In 2023, seven of India’s largest IT firms — including TCS and Infosys — laid off 75,000 employees, about 4 per cent of their combined workforce. While companies deny AI was the cause, hiring has slowed, and the sector is re-evaluating its future.

Reinvention: A familiar challenge

There is no ready template for the AI era, but India has reinvented its tech destiny before — from creating IITs, to pioneering outsourcing, to building domestic digital infrastructure.

Today, the challenge is to develop deep AI expertise, own intellectual property and build trusted, scalable solutions. The churn ahead is real, but so is the opportunity.

STORY CONTINUES BELOW THIS ADFrom margins to main stage

As India marks 78 years of independence, its technology story is more than an economic triumph. It is proof that long-term vision, bold ambition, and resilience can take a nation from colonial deprivation to global digital dominance.