Archive · 6 Sep 2025
India's 1997 IT Pact Criticized for Hindering Hardware Growth
In 1997, India and the US made a trade deal on information technology.
This deal removed taxes on IT-related things, which the US supported.
The US wanted India to focus on software, but India's industry wanted to protect hardware.
Critics now say the deal stopped India from building its own hardware industry.
Experts believe this caused India to rely heavily on the US IT sector.
The Indian government is working on programs to boost local hardware manufacturing.
The 1997 IT Agreement between India and the US removed tariffs on IT trade.
The US encouraged India to focus on software, not hardware.
Critics say the agreement hindered India's hardware sector.
India's IT sector is now reliant on the US.
The Indian government aims to boost manufacturing through 'Make in India'.
- Who
- India and the United States; Divya Kumar Soti, Dr. Arvind Virmani
- What
- The 1997 IT Agreement and its impact on India's hardware industry.
- When
- The agreement was signed in 1997.
- Where
- India and the United States.
- Why
- Economists argue the agreement hindered India's hardware production.
Critics of the Agreement
Supporters of the Agreement
Impact on Hardware Manufacturing
Critics of the Agreement
The agreement harmed India's ability to compete in hardware production.
Supporters of the Agreement
The articles do not provide the supporters of the agreement's viewpoint.
Reliance on the US
Critics of the Agreement
The agreement has made India's IT sector overly reliant on the US.
Supporters of the Agreement
The articles do not provide the supporters of the agreement's viewpoint.
- Agreement Year
- 1997
- Countries Involved
- India, United States
- Main Effect
- Removed tariffs and barriers on IT trade
- US Encouraged
- India to focus on software services
- Current Government's Initiatives
- 'Make in India', PLI schemes to boost manufacturing
