India has, quite unexpectedly, emerged as a major world center for software production and exports since the early 1990s. Its rise was unexpected as it had a very poor and technologically backward economy that remained largely isolated from the world until the late 1980s. However, with the opening up of the economy in the early 1990s, when the central government initiated wide-ranging, market-oriented economic and policy reforms, this industry has shown very remarkable growth, sustaining annual growth rates of around 30–40% for over 15 years.
The development of this industry in India has been very remarkable as it challenges two central ideas in the contemporary economic-development literature. First, it shows that an industrially backward economy can become a global player in a high-technology industry within a short span of less than 2 decades, something that the existing literature did not consider feasible.