State, Business Association, and Diaspora: The Structure of Governance in the Indian IT-BPM Sector

Abstract The Indian information technology and software services sector has been a poster boy of Indian business. The purpose of this paper is to offer an interest-based institutional understanding of the factors behind the governance of the IT sector’s growth, which departs from the national narrative of economic change. Three actors are identified, namely, the state, the industry and its business association, and the role of the Indian diaspora that links the national structure of production with the international market. I show that in this dynamic interconnection, the Indian IT-BPM sector has coalesced around a development model (if it can be labeled as such) in which the state has been an initial facilitator of the now largely privately-led IT industry, with external (international) demand as the main driver. The response to this exogenous driver has been self-governance for collective action and institutional interventions such as state-sponsored software technology parks, repurposing of educational infrastructure to meet industry demand for technical workers, creating an industry-level business association, namely, NASSCOM, and internalizing the business requirements of global clients, and aligning them with the interests of the IT-BPM sector.