Today, India is a world leader in real-time digital payments. It processes billions of transactions each month through UPI. India’s IT companies power much of the world’s software needs. From Aadhaar to UPI, from Infosys to TCS, India’s tech innovations have reshaped its economy and they’ve set new benchmarks for the world.

But how did a country that had just 38 engineering colleges and no computing industry in 1947 become an IT and tech powerhouse? This is the story of India’s rise from colonial rule to digital dominance.

The Foundation: Education and Indigenous Science

When British rule ended, India inherited a battered economy. The British ignored education, science, and industry. For a population of 350 million in 1947, we had less than 40 engineering colleges, and only 3,000 students were training in technical fields. But within decades, India became a global leader in software and digital infra. This transformation was not swift and it was not accidental. It was the result of landmark policy changes, scientific ambition, and relentless enterprise.

Our story begins in 1950 when India opened IIT Kharagpur (Indian Institutes of Technology). Today they are the country’s top institutes in science and tech. But the beginnings were humble. IIT Kharagpur started with just 10 departments, 42 teachers, and 224 students. And guess where they set up the institute? In what used to be a colonial detention camp. I suppose it was a symbolic choice.

Then-Prime Minister Jawaharlal Nehru was bullish about these plans. He wanted to use science to rebuild the nation. Over the next decade, four more IITs were set up: IIT Bombay (1958), IIT Madras and IIT Kanpur (1959), and IIT Delhi (1961). These institutes were modeled on MIT in the US. India wanted institutes that did not just produce engineers but also led research and industrial transformation.

Building Asia’s First Digital Computer

Around the same time in Mumbai, the groundwork for India’s digital future was being laid at the Tata Institute of Fundamental Research (TIFR). In 1954, they embarked on an ambitious project. A six-member team was set up, and the man in charge was R. Narasimhan, a young professor recruited by Homi J. Bhabha, the father of India’s nuclear program.

Narasimhan and five other scientists set out to build a computer. None of them had seen one before. All they had were blueprints and passion. Five years later, they delivered the TIFRAC (Tata Institute of Fundamental Research Automatic Calculator). This was Asia’s first indigenous digital computer. It put India on the global computing map and marked the modest beginning of India’s journey toward tech supremacy.

The Birth of the IT Outsourcing Model

The first two decades were mostly about laying the foundation. Then in 1968, our story takes a defining turn. Indian industrialist J.R.D. Tata wanted to modernize the Tata group and use computers to process data. He recruited Fakir Chand Kohli, an engineer and manager at Tata Electric. Kohli’s mission was to build a team that could master computer technology and help automate Tata’s businesses. That’s when TCS (Tata Consultancy Services) was born.

TCS started small, developing technologies to manage punch cards and payrolls. But Kohli had a bigger vision. He believed they should offer these services to the whole world, famously saying: “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.”

Kohli convinced the Tata Group to take on foreign clients. Their first major software deal came in 1974 when TCS was asked to develop software for Burroughs, a leading American computer manufacturer. This was the origin of the IT outsourcing boom. Because there was no local demand for software and regulations were strict, Indian firms sent engineers abroad to write code. It was an export model born of necessity.

In 1977, a protectionist policy unintentionally helped the domestic tech industry. India expelled multinationals like IBM over foreign equity rules. Homegrown firms filled the gap, and players like Shiv Nadar’s HCL entered the field, seizing the opportunity to provide computing solutions.

Liberalization and the Tech Boom

Then came the major turning points:

• 1984: India introduced a new computer policy under Rajiv Gandhi’s government. Tariffs were cut, and licensing barriers for software exports were removed.

• 1991: Sweeping economic reforms liberalized the Indian economy.

For the software industry, there was no looking back. Exports rose exponentially. The world now turned to Indian IT players not just for cheap labor, but for reliable, high-quality services. This momentum gave birth to India’s IT giants. Companies like Infosys, Wipro, and TCS boomed, and Bengaluru became the Silicon Valley of the East.

Digital Public Infrastructure: Solving Domestic Problems

Over the last decade, India has leveraged this know-how to solve its own problems, building digital infrastructure for its people.

• UPI (Unified Payments Interface): Launched in 2016, it turned smartphones into banks and made payments as easy as a tap on a screen. By 2025, UPI accounts for nearly 84% of all digital transactions in India. The UN has even praised UPI for enabling financial inclusion.

• The JAM Trinity: This had a sweeping effect on Indian banking by combining three powerful innovations:

• J (Jan Dhan): Zero-balance bank accounts under India’s financial inclusion program.

• A (Aadhaar): India’s unique ID system.

• M (Mobile Connectivity): Transforming welfare and financial inclusion, especially in rural India.

The JAM Trinity enabled direct bank transfers of subsidies, meaning money was transferred directly to recipients without leakage or corruption. These innovations are efficient, democratic, cost-effective, and reach the last mile.

The Next Frontier: The AI Challenge

As we celebrate these successes, we must also be cognizant of the new challenge on the horizon: Artificial Intelligence. India’s tech sector is at a crossroads. The IT industry earns more than $245 billion a year, with over $200 billion coming from exports (software services, maintenance, testing) for global clients.

But AI could hit this model hard. Automated tools can now write code, test programs, and handle back-end operations. The impact is already showing. In 2023, seven of India’s biggest IT firms laid off 75,000 workers (4% of their combined workforce). While they say it wasn’t because of AI, the writing is on the wall. Hiring is slow, and the industry is re-evaluating its future.

The old formula may no longer work. We need a new strategy, and while there is no template for this pivot, the good news is we’ve done it before. From building talent in the IITs that now runs Silicon Valley, to outsourcing software, to solving domestic challenges with tech—India has beaten the odds.

What we face now is more of a churn. India must develop deep expertise in AI, own intellectual property, and lead in building trusted, scalable solutions. Our tech story is not just an economic success; it is living proof that long-term thinking and bold ambition can take a nation from the margins to the main stage.