India's Technology Ecosystem

I built my first executive search practice placing technology leaders across India at a time when most international clients thought "Indian technology" meant one thing: a large IT services organisation in Bengaluru or Hyderabad delivering outsourced work to Western companies.

That description was never accurate, and it's increasingly useless. India's technology industry is actually three overlapping stories, a services foundation, a consumer internet wave, and a current SaaS and deep tech emergence, each with different dynamics, different talent profiles, and different implications for companies hiring or building here. Conflating them produces the wrong searches, the wrong hiring decisions, and the wrong bets.

Here's how I think about each layer.

Layer one: the IT services foundation

The Indian IT services industry, Infosys, TCS, Wipro, HCL, and hundreds of smaller firms, was built over roughly three decades on the premise that India could deliver software development, IT operations, and business process work at lower cost than Western companies could do internally.

This premise turned out to be correct, and its execution created an industry generating $297 billion in annual revenue as of FY25, with $233 billion in exports, the world's largest source of technology services exports. More importantly for the ecosystem, it created the training infrastructure for hundreds of thousands of software engineers, the employer base that demonstrated that technical careers were viable, and the professional credibility that established India as a destination for serious engineering work.

The IT services model is now under structural pressure from automation and AI. Work that was delivered through labour arbitrage, large teams of engineers doing repetitive or well-defined tasks, is increasingly automated. The model is not disappearing; the complexity of enterprise technology systems ensures continued demand for human expertise. But the growth dynamic has changed. The next decade for Indian IT services is about moving up the value chain toward consulting, product development, and AI implementation rather than headcount-based delivery.

Layer two: the consumer internet and unicorn wave

Starting around 2015 and accelerating through 2021, India produced a wave of consumer internet companies, Flipkart, Ola, Paytm, Zomato, BYJU'S, and dozens of others, that attracted large amounts of domestic and international venture capital and generated a cohort of unicorns that rivalled China's in absolute count during peak years.

This wave created several things beyond the companies themselves: a class of founders and early employees who had experienced high-growth company building, an LP and GP investor community capable of leading large rounds, a talent market for product and growth roles that had barely existed before, and a set of failures and disappointments that produced the unsentimental operator class that the next wave of companies is drawing from.

The consumer internet wave also illustrated India's structural challenge for technology: a market of 1.4 billion people with median income that is among the world's lower quartile produces consumer technology companies that face genuinely difficult unit economics. Serving large numbers of low-ARPU users at high acquisition cost produces cash-consuming businesses that depend on the bet that lifetime value will eventually exceed acquisition cost at scale. This bet worked for some companies and failed for many others. The lessons, about unit economics discipline, about the difference between GMV and revenue, about the costs of growth-at-all-costs, are now built into how the next generation of Indian founders operates.

Layer three: SaaS and deep tech

The current and most structurally significant wave in Indian technology is the development of software-as-a-service companies targeting global markets and, increasingly, deep technology companies in AI, semiconductors, defense tech, and biotech.

Indian SaaS is a global story. Companies like Freshworks, Zoho, Postman, BrowserStack, and dozens of smaller players have demonstrated that product companies built in India can compete globally. The combination of engineering quality, cost structure, and English proficiency creates advantages at the product-building stage that translate into competitive pricing and margins at the go-to-market stage. Indian SaaS companies targeting US and European SMB and mid-market customers can operate at significantly lower cost than US-native competitors with comparable product quality.

Indian SaaS companies targeting US and European customers can operate at significantly lower cost than US-native competitors with comparable product quality. The model is proven. The ceiling is not yet known.

The deep tech wave is earlier and less proven but significant. Government policy changes, particularly in defense (FDI liberalization, procurement preference for domestic vendors), semiconductors (the India Semiconductor Mission), and space (IN-SPACe enabling private launch), have created new categories of investable Indian technology company that did not exist before. The talent pipeline from IITs with specialization in hardware, materials science, and engineering is being activated for company formation in ways that the previous software-dominant ecosystem did not require.

Bangalore, Hyderabad, Pune, and the geography question

Indian technology is geographically concentrated in a way that creates both depth and fragility. Bangalore is the dominant centre: the density of engineering talent, the depth of the VC and angel community, the concentration of mature technology companies that produce the experienced operators and executives that startups need is greater here than anywhere else in India.

Hyderabad is the second-tier technology city, substantial, with real depth in IT services, pharma technology, and a growing startup scene, but still clearly behind Bangalore in ecosystem density. Pune has engineering talent and a strong manufacturing sector that creates industrial technology opportunities. Chennai has historical IT services concentration and is developing more in semiconductor and hardware roles.

The geography question matters for anyone building or hiring in Indian technology, because the talent market in each city is distinct. What you can hire in Bangalore at market rate is not identical to what you can hire in Hyderabad, and the two differ from what's available in Pune. Understanding the specific depth of each city's talent pool in your domain is required for building a team rather than a headcount.

What the ecosystem produces and what it still lacks

Indian technology produces, at globally competitive quality: software engineers across most domains, data scientists and ML engineers, product managers (at growing depth), and increasingly, founders with previous high-growth company experience.

What the ecosystem still lacks, relative to the US: designers (product design, in particular, remains a constraint), experienced B2B salespeople (the enterprise GTM function is still developing), and the density of repeat founders with multiple successful exits that generates the informal knowledge transfer that Silicon Valley has built up over 40 years.

These gaps are narrowing. The first generation of successful Indian startups is producing the second generation of Indian founders, who are starting with more experience and more network than the founders who came before them. In another 10 years, the ecosystem depth will look substantially different.

The trajectory is clear. I see it in the quality of operators coming out of first-generation Indian companies who are now starting their second businesses. I see it in the founders who are returning from the US with Silicon Valley operator experience and Indian market insight combined. The pace is the question. But the direction is not.

The ecosystem gaps are narrowing. The first generation of successful Indian startups is producing the second generation of founders who start with more experience and more network than anyone who came before them. In another decade, the depth will look substantially different.

Manas Majhi has placed technology executives across India's three ecosystem layers. He writes about talent, technology, and what India is building next.

See also: India's Startup Ecosystem, Building for a Billion People, Digital Public Infrastructure

Sources

India's IT industry: $297B revenue, $233B exports in FY25, NASSCOM via Business Standard

India unicorn tracker: Inc42

NASSCOM Technology Sector Strategic Review 2025