The Indian software industry was non-existing up to 1974. According to Tschang (2001), the eolution of the software industry in India can be explained by three movements.

History: unproductive investments preparing the ground

Tschang (2001) states that the software industry has found its origin in cities such as Mumbai (Bombay) and Bangalore. Bangalore was an excellent place for to set up an establishment thanks to the large pool of scientific talent developed by educational organizations and the laboratories that were provided by the government. Unfortunately, there was little gainful employment through which these investments werent productive from an economic point of view. However, the combination of these two previous mentioned factors formed a critical basis for the growth of the software industry in India.