#xiii Beyond Citations | Revisiting India's IT history
Did the year 1999 help India’s software industry reach the stage where it is today?
Y2K, or year 2000, is a significant yet almost forgotten moment in India’s IT history. But it is being resurrected back into the public debate by S. Krishnan, secretary at the Ministry of Electronics and Information Technology. The secretary likened AI advancements to a Y2K moment for the Indian IT industry while addressing business and industry leaders at a Hyderabad event in February 2025.
More recently, speaking at the Carnegie India Global Technology Summit in April 2025, Krishnan again likened AI to a Y2K moment for India. “India is looking to lead by example, especially in building collaborations among democratic nations. Our focus is on compute, foundational models, skills development, and creating an AI ecosystem that is democratic and inclusive,” The Print reported him as saying. Additionally, the secretary also envisioned a leadership role for India in the Global South in the AI domain.
What is the Y2K moment? What role did it play in India’s tryst with information technology? M. S. Krishnan, Narayan Ramasubbu, and Ramanath Subramanian discuss in detail the history of India’s IT industry and the role of Y2K in their following 2009 book chapter:
M. S. Krishnan, Narayan Ramasubbu, and Ramanath Subramanian, “Evolution of the Indian Software Industry: The Emergence Model of Mobilizing Global Talent.” In Jayashankar M Swaminathan (ed.), Indian Economic Superpower Fiction or Future? (World Scientific, 2009), pp. 59–74. https://doi.org/10.1142/9789812814661_0005
Y2K simply is a shortened way of referring to the year 2000 problem. Beginning in the 1980s and increasingly in the 1990s, global corporations and IT professionals started worrying about the fate of computer systems when the clocks would hit 1 January 2000. The reason for their worry was that most of the legacy computer systems in use in large corporations such as automobile manufacturing plants, transportation networks including airlines and financial world of banks were coded only for the last two digits of any given year. This was done given the limited memory and processing power of legacy computers. Therefore, it was feared that due to the Y2K bug, computer systems would not be able to distinguish between 1900 and 2000 leading to cascading failures across a host of industries. In the late 1990s, paranoid about the cataclysmic impacts of Y2K, companies and governments in the West invested billions of dollars to manually fix their codes. It is in this wave that Indian software professionals made a global mark. That Indian coders were fluent in English and could be hired for relatively low wage rates helped their case.
While Krishnan et. al. think that Y2K played a role of catalyst, for them it was not the primary driver for India’s software industry.
While there is a common misconception that the year 2000 (Y2K) problem was the primary driver bringing Indian software talent to the forefront of the global market, this transformation had, in fact, begun much earlier. The Y2K problem was simply one of the catalysts in this journey. The fact is that this industry had begun to mature even before the rise of the Internet.
Krishnan et. al. divide four decades of India’s software industry growth into four phases (covering early 1970s to late 2000s). The 1970s according to them was a decade defined by provisioning of support services by Indian software companies. Quite early into the introduction of computers, bulky mainframes dominated this period. Burroughs, an American manufacturing giant at that time, partnered with Tata to seek support services such as software testing and porting of applications from one hardware to another.
The authors define the 1980s as a decade of local awareness. The initial successes of the 1970s spread greater awareness about the potential of India’s software industry. The decade saw the early proliferation of programming education, embodied by the newly launched three-year master’s in computer applications and other private sector certification initiatives. Motorola and Texas Instruments strengthened their R&D presence in the country, thereby helping Indian software professionals to move beyond just testing to play comprehensive roles including in designing.
The 1990s was shaped to some extent by the liberalization of the Indian economy. The authors call it a decade of global awareness and confidence. Engineering education exploded in this decade and Indian software companies started providing end-to-end solutions. Redesigning of systems to keep pace with the newly dawned global internet era also created opportunities for the country. Y2K became a moment for India because her programmers had the expertise to work with legacy systems as well as porting.
The 2000s was a decade defined by global firms betting big on India. The adept handling of the Y2K bug by Indian software companies and engineers had built their reputation in the global IT market. The decade saw Indian software companies raking in billions of dollars. The investment in research and product development initiatives also boomed.
Since the book chapter came out in 2009, it has missed the last 15 years of the Indian software industry journey — in this period, Bengaluru cemented its position as the silicon valley of India, a vibrant culture of startups emerged, and engineering education arguably occupied the most coveted position among the aspirational middle class.
How would advancements in AI define the 2020s for the Indian software industry?