#adigitalblogger #itsector #ibm
When IBM Left India:
Today the IT Industry stands at a market cap of 19.6 Lakh Crores, employing more than 50 Lakh Indians across the country, yet all this couldn’t have been possible if IBM didn’t quit in 1978.

IBM, set up operations in India in 1951 following an invitation from Prime Minister Jawaharlal Nehru.

But what was it really doing in India?

It brought discarded mainframe computers from America, refurbished them here and leased them out to users at exorbitant prices.

This way it kept the technology in the Indian market one or two generations behind the latest.

But post the Emergency era, a new Janta Government came to India in 1977. This was the beginning of the end of IBM in India as the new government’s Industry Minister was very strict with Foreign Exchange Regulation Act (FERA) that capped foreign equity at 40%.

He had already ousted Coca-Cola out of India, for not complying with the rule and now it was IBM’s turn.

IBM of 1978 was the unchallenged lord of the global computer industry. But Fernandes insisted that if IBM wanted to stay on in India it would either have to share its technology or list the company on an Indian stock exchange or ensure that its Indian operations were majority controlled by an Indian partner.

IBM refused and hence had to exit India in June 1978.

With their exit a big gap was left in the not even fully born Indian IT sector.

However, soon Indian startups like Shiv Nadar’s HCL, Premji’s WIPRO, Tata Sons TCS started manufacturing and providing both software and hardware to India.

After 15 years when IBM did return, it was shocked to look at how advanced Indian IT industry had already become.