The economic effect of the Innovative and technologically inclined services sector in India—accounting for 45% of the country's GDP and 35% of export earnings as of 2007, while employing only 30% of its workforce—is summarized as here: "Today, Bangalore is popularly known as the Silicon Valley of India and contributes 36% of Indian IT Exports. India's second and third largest software IT companies are head-quartered in Bangalore, as are many of the global SEI-CMM Level 5 Companies."

Various IT companies are based in Mumbai, such as TCS (among India's first and largest), LnT Infotech ,Infosys, Patni, and i-Flex (Now acquired by Oracle ).

Thiruvananthapuram (Trivandrum), the capital city of Kerala state, is the foremost among the Tier II cities that is rapidly growing in terms of IT infrastructure. As the software hub of Kerala (more than 85% of the state's software exports are from here), comparisons have been drawn in between Trivandrum and Bangalore. Majority of campuses and headquarters of companies such as Oracle Corporation, Infosys, UST Global and IBS Software Services are located in this city. India's biggest IT firm Tata Consultancy Services (TCS) is building the country's largest IT training facility in Trivandrum—the project is worth INR11 billion and will have a capacity of 11,000 seats. The completion of the facility is expected in 2016 or 2017.

In Jan 2012, French multi-national company Capgemini announced the establishment of the software centre at the Technopark IT hub in the capital of Kerala. At the time of the announcement, Technopark's business development manager stated: "In two years’ time, Technopark IT campus is poised to become one of the country's leading IT hubs".

On 25 June 2002, India and the European Union agreed for bilateral cooperation in the field of science and technology. A joint EU-India group of researchers and scholars was formed on 23 November 2001 to further promote joint research and development (R & D). India holds observer status at CERN, while a joint India-EU Software Education and Development Centre will be located in Bangalore. The success of Information Technology industry in India not only had economic repercussions but also had far-reaching political consequences.

This sector has also led to massive employment and job generation. The IT industry continues to be a net employment generator - expected to add 300,000 jobs in FY2020, therefore providing direct employment to about 3 million, and indirectly employing 9.2 million people. Generally dominant player in the global outsourcing sector. Although, the sector continues to face new challenges of competitiveness in the globalized and modern world, particularly from nations like China and Philippines.