Literature on India’s software and information technology services (SWIS) sector is doubtful about any positive impact on wider development because it finds that the sector’s forward and backward linkages predominantly lead abroad. Using new data, this article re-evaluates the sector’s role and finds that there is now much more room for optimism. Domestic forward linkages have been growing very quickly and they are responsible for significant output and productivity gains in sectors like communications, financial services and retail. Additionally, backward linkages from the sector and its employees stimulate demand for domestically produced goods and services like construction, catering and travel. Together, these effects add up to a significant contribution to India’s economy, and lead to the conclusion that SWIS may soon become a leading sector.
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