chapter 3

initial assessment: republic of india

Executive Summary

The Internet infrastructure in India today is poor. Although the number of users is relatively low, they already overwhelm the network’s capacity. The dimensions of the Internet in India are pro­vided in Table 10 and Figure 1. Government policies and inaction have been the principal causes of the Internet’s lack of development in India, compounded by the country’s poverty and the attendant extremely poor telecommunications infrastructure. Privatization of the telecommunica­tions sector has begun, but noticeable improvements in basic telecommunications (e.g., the quality





(1) Experimental

The Internet user community comprises less than 1 person in 1,000. However, the user community extends well beyond a core of networking professionals, and there are hundreds of computers connected to the international Internet. This dimension will likely increase to 2 by 1999.

Geographic Dispersion

(2) Moderately


Internet points of presence are currently located in 14 of 25 States and 3 of the seven Union Territories (17 of 32 first-tier administrative divisions). Planned near-term expansion will connect three more States. There are international connections from at least 12 locations, six of which serve the public network.

Sectoral Absorption

(1) Rare

There is leased-line connectivity to the Internet in less than 10 percent of the constituents of every sector.

Connectivity Infrastructure


The average bandwidth of the domestic infrastructure is less than E-1 (2.048 Mbps). There are several closed and bilateral Internet exchanges. Access is predominantly via modem, but 64 Kbps leased lines are available and used.

Organizational Infrastructure

(2) Controlled

There is only one commercial Internet service provider (ISP) offering public Internet access. The legal barriers to establishing new ISPs have been eased, although the degree of competition that will be allowed remains unclear.

Sophistication of Use

(2) Conventional

The Internet is being used to improve the efficiency and expand the scope of current activities and processes without fundamentally changing them.

Table 10. Internet Dimensions for India

and availability of local loop, inter-exchange, and long distance connections) will take several years to achieve, even in the absence of any further government interference.

Figure 1. Indian Internet Dimensions, 1988-1998

The development of the Internet in India has occurred in three phases: a promising beginning in the 1980s, a lengthy period of stagnation, and the current phase that promises rapid future growth. The academic community was the first to use the Internet and was responsible for its introduction into India. This is consistent with the “early” model of Internet diffusion. However, from its introduction until the present, the Internet has seen little development. Future growth of the network will be driven by commercial forces and requirements, consistent with the “later” model of Internet diffusion.

·   Promising Beginning The first Internet connection to India was effected in 1989.

·  Interest in the Internet resulted in government action in 1986, with the establishment of the Education and Research Network (ERNET) as a project within the Department of Electronics (DoE). At this early date, the government telecommunications agencies had no interest in what was viewed as a non-standard network protocol with no commercial applications.

·  Coincident with the beginning of ERNET, the DoE established the Software Technology Parks of India (STPI) as incubators for small software development companies in an effort to spur the export of software.

·  Following this early recognition of the Internet as a potentially useful tool for the academic community, nearly three years elapsed before the first connection to the Internet was made. The National Centre for Software Technology (NCST) brought the ERNET on-line in 1989, followed shortly thereafter by STPI.

·   Stagnation From 1989 through 1995, there was hardly any further growth of the Internet.

·  The DoE did not have adequate funding to proliferate the ERNET throughout the academic and research communities. As a result, the ERNET grew only very slowly and only as a result of direct efforts by institutions that wished to be connected. Eventually, 700 organizations were connected, but use and bandwidth continue to be limited.

·  Although STPI established a satellite communications network connecting the member parks and companies with each other and clients overseas, this network was and continues to be used principally for point-to-point communications between individual companies and their clients. SoftNet has offered Internet links for almost a decade, but the system remains under-utilized.

·  The government telecommunications monopolies, the Department of Telecommunications (DoT) and Mahanagar Telephone Company Limited (MTNL) for domestic communications and Videsh Sanchar Nigam Limited (VSNL) for international communications, continued to refuse to consider implementing TCP/IP networking. Such efforts as were expended on developing data networks focused on accepted international standards such as X.25 and X.400.

·   Poised for Growth? Commercial Internet connections became available in India in 1995.

·  VSNL established the first commercial Internet links as a “gateway” service in August 1995, adding it to its portfolio of international telecommunications services. Additional nodes for local access were built by VSNL and turned over to the DoT for operation.

·  Despite the demand for services, however, the prices remained high for several years, and access was limited by the small number of hosts and limited number of dial-up lines. Between 1995 and early 1998, only 30 nodes, connected to the Internet through six international satellite gateways each with limited bandwidth, were built. There were only about 150,000 subscribers—about 0.01 percent of the population—by mid-1998, fully half of whom had only signed up for service following a significant price reduction in January 1998.

·  Government and court decisions announced in June and July of 1998 have cleared the way, at least in principal, for the licensing of an unlimited number of private ISPs, which will also be allowed to establish international links to the Internet independent of the government monopolies. This freeing of the market is expected to result in a large infusion of investment and the rapid creation of multiple, competing services.

·  The basic telecommunications infrastructure is also expected to improve, albeit more slowly, as the sector is opened to competition and new providers bring their networks on-line. The Indian railroads and electrical power companies (themselves government monopolies) are already installing new fiber optic networks along their respective rights of way.

There is a high demand for Internet services, especially in the private sector. Public-sector undertakings have made some efforts, albeit with only limited success, to meet this demand. Recognizing its inability to provide the capital investment required for rapid network expansion, and in keeping with the general trend of privatization of the telecommunications sector, the Indian government decided to open Internet service provision to the private sector. Bureaucratic “turf battles” between incumbent public-sector operators and the newly-created independent regulatory authority have resulted in a delay of about one year in the licensing of private Internet service providers. Licensing should begin in the fourth quarter of 1998 and the first private commercial service providers could be offering Internet access in early 1999.

The Bharatiya Janata Party (BJP), which took over as the leading party in the Indian government earlier this year, identified information technology (IT), especially software exports, as key to the country’s future economic growth and development. In keeping with the priority that its party platform placed on IT, the BJP government appointed a blue-ribbon National Task Force on Information Technology and Software Development to identify the relevant goals and the means for achieving them. In the IT Action Plan produced by the Task Force (included at Tab C), the further diffusion of the Internet was explicitly identified as important for the country’s future. Specific recommendations included requirements to provide Internet connections in every district, school, and medical establishment.

The IT Action Plan was approved by the Indian Parliament in July 1998, and now has the force of law. This means that every ministry and department of the Indian government has been tasked to issue or amend the required laws and regulations to implement the Action Plan’s recommendations. The next step, identifying the specific steps to be taken within the Indian government to implement the various recommendations, is underway. There are early indications that the recommendations that require legislative action, such as changes in import and export regulations, will be implemented by the Parliament. Whether the vast Indian bureaucracy will respond to the bulk of the recommendations, however, is far from certain. The most significant shortfall is the lack of identified budget resources to support implementation of the Action Plan. The National Task Force evidently has placed a great deal of confidence in the private sector’s ability and willingness to invest in the country’s infrastructure and the further development of the IT sector. Citizen participation is critical as well, since the potential for successful private sector initiatives relies to a great extent on the Indian consumer.

Government inactivity has been largely responsible for the slow pace of Internet development in India to date. The adoption of the IT Action Plan signals the Indian government’s recognition that the country is at a strategic crossroads, where is must chose whether to continue business as usual and continue to fall behind not only the developed world but its own neighbors or overhaul the government bureaucracy to more effectively develop and employ the country’s vast human resources. Attempts to realize the Action Plan’s ambitious program will have a salutary effect on the availability and use of the Internet in India. The further development of the Internet will, in turn, contribute to the success of the Action Plan. However, even should the Action Plan be entirely or largely scrapped, unlikely in our judgment, the current regulatory and commercial environments will ensure that the Internet continues to grow in India, albeit at a slower pace and less widely than it would have with the support of the Action Plan’s initiatives.

In this final quarter of 1998, the Internet in India is beginning to show some robust growth, and the situation is such that it is poised for exceptionally rapid growth over the next twelve months, should the government do its part. With the recent decisions and court rulings that have opened the way for private Internet services providers to compete with the public sector operators, the prospects for competition are good. The government must come through, however, with the promised ISP licenses, and the defense ministry must approve the ISPs’ international connections. Legislative action is required to authorize competition among domestic backbone providers. To ensure that the full potential of the Internet is realized, the government must make at least a good-faith effort to implement the Action Plan. This will require not only the issuance or amendment of laws and regulations, no simple task in itself, but the enumeration of specific steps and processes to implement the Action Plan’s recommendations. The bureaucracy must be tamed, as well. Most importantly, where the government cannot directly fund recommended projects, and this includes most of the Plan’s recommendations, the promise of incentives to lure private sector investment must be fulfilled. These requirements, however, strike at the heart of any bureaucracy’s core values: its own processes and its revenues, both of which it seeks to maintain and increase as a matter of course. As was recently noted in the Indian press, “it’s an expensive business keeping the Indians in poverty.”[8]

The government of India has recognized that the country requires a “jump start.” The lessons of the recent problems with privatization, such as the extensive litigation and loss of international capital investment in the basic telecommunications circles and mobile telephone projects, suggest that the government must more carefully plan its projects and be much more consistent in their implementation, especially with respect to the lessening of the government’s direct role. The government appears to recognize these lessons, and may even have taken them to heart. A critical mass may have been reached. IT is developing ever more quickly and “information content” of all products is rapidly increasing. Despite impressive achievements, Indian IT has largely been stagnating. With business as usual thoroughly discredited, the government’s actions during the next year will likely determine whether India enters the 21st century in the vanguard or bringing up the rear.

A cautionary note Despite all the favorable portents, there is still a significant possibility that the bureaucracy will, if not stifle, at least stall or weaken future development. As N. Vittal, former Secretary of Telecommunications and a member of the National Task Force, reminds us: “Don’t underestimate the power of the babus. An army marches on its stomach. But the government marches on paper.”[9]


The “largest democracy in the world,” India is the world’s second most-populous nation, although it is only about one-third the size of the United States. The country’s population of more than 960 million people (Table 11) comprises two major ethnic groups, Indo-Aryan and Dravidian, speaking 15 official and dozens of unofficial languages, which are approximately as mutually intelligible as those in Europe and are not written using the Latin or other common alphabet. English is thus the language of inter-communal business and much of the central (Union) government’s operations, as well as of the judicial system. As one Mumbai (Bombay) resident mildly exaggerated, “India has 980 million people and even more gods. Travel 30 or 40 kilometers, and everything changes: people, climate, culture, geography, food, religion.”

Table 11.

India in Statistics







millions, 1996

millions, July 1997 estimate

Population density


per km2, 1996



US$billions, 1995

GDP per capita


US$, 1995



thousands, 1996



telephones per 100 inhabitants, 1996

Teledensity in largest city


telephones per 100 inhabitants, 1996

Cellular subscribers


thousands, 1996

Cellular density


cellular lines per 100 inhabitants, 1996

Personal computers (PC)


thousands, 1996 estimate

PC density


PCs per 100 inhabitants, 1996 estimate

Television sets (receivers)


thousands, 1996

Television set density


TVs per 100 inhabitants, 1996

Literacy rate


% of population >14 years old, 1997 est.

Infant mortality


deaths per 1000 live births, 1997 est.

From the first known settlements around the 24th century B.C., through the middle of this century, the Indian subcontinent has been subjected to five major invasions from the north and west, three of which resulted in the establishment of foreign rule over much of the region. Also, during the height of European exploration in the 16th century, relatively small sections of the country were acquired by several European powers. Today’s India still shows the effects of Mogul rule in its most famous tourist sites and lingering divisions between Muslims and Hindus, and the effects of more than a century and a half of British rule, most especially in the extensive government bureaucracy and common use of the English language. Portuguese can still be heard in the former colony of Goa, while French is common in the villages of the Pondicherry enclaves.

The modern Republic of India was created in August 1947, when the British granted its former colony its independence, at the same time separately creating the Islamic Republic of Pakistan in the northwestern and northeastern regions of the colony. The ensuing flight of Hindus from Pakistan and Muslims from India resulted in a population exchange of about 10 million people and a huge death toll from inter-ethnic violence. India has since fought two wars with Pakistan, the most recent of which resulted in the secession of East Pakistan as Bangladesh. The northern border region between India and Pakistan, Kashmir, is still contested between the two countries and is the locus of continued military deployments and sporadic armed conflict. India also fought a border war with the People’s Republic of China in the Arunchal Pradesh, the border of which is still disputed. Thus, almost half of India’s land borders abut hostile neighbors.

Text Box:  
Figure 2. Map of the Republic of India
The Indian subcontinent is a 3.3 million km2 diamond that dominates the Indian Ocean, with 7,000 km of coasts on the Indian Ocean, North Arabian Sea, and Bay of Bengal (Figure 2). The extent of the modern republic, with the exception of the Northeastern Region, is naturally bounded by these coasts and the mountains to the northeast and northwest. Within its borders, virtually every type of climatic and geological region can be found. The Vindhya and Satpura mountain ranges of central India, just north of the Tropic of Cancer, have historically impeded north-south communication, reflected in the virtually independent development of empires and cultures in northern and southern India.[14] The country is divided into 25 states and seven Union territories that are administered by the central government, listed in Table 12.

Despite the large populations and attendant high population density, India remains a largely rural country, with about 70 percent of the population residing outside of the major metropolitan areas. About 67 percent of the work force is employed in the agricultural sector.[15] The varying geological and climatic conditions and the dispersion of the country’s vast population make the development and maintenance of basic infrastructure components (e.g., roads, electrical power distribution, telecommunications) difficult and expensive. The poor infrastructure and population density and dispersion compound the problems caused by frequent natural disasters such as flooding and earthquakes.

Key Organizations

Department of Telecommunications (DoT)—The DoT (which does not have a Web site or home page) is subordinate to the Ministry of Communications and was until recently the monopoly domestic telecommunications service provider, except in Mumbai and New Delhi. The provision of local telecommunications services has been liberalized, with commercial groups now licensed to provide service in 20 regional “circles.” DoT remains the monopoly provider of long distance (i.e., inter-“circle”) telecommunications. DoT operates the domestic terrestrial IP infrastructure and offers Internet service to the public in conjunction with VSNL.

Table 12. Indian States and Union Territories



State or Union Territory*


Andhra Pradesh




Arunachal Pradesh


















Tamil Nadu

Chennai (Madras)





Himachal Pradesh


Uttar Pradesh


Jammu and Kashmir


West Bengal




Andaman and Nicobar Islands*

Port Blair




(metropolitan region)

Madhya Pradesh


Dadra and Nagar Haveli*



Mumbai (Bombay)

Daman and Diu*





(metropolitan region)









Text Box:  ERNET India—An autonomous society, ERNET India ( was established in 1998 under the Department of Electronics (DoE) to assume the task of operating, maintaining, and further developing the Education and Research Network, which was established by the Information Infrastructure Division of the DoE in 1986. ERNET India operates an IP network and offers Internet connectivity via VSNL to member organizations from the academic and research sectors.

Mahanagar Telephone Nigam Ltd. (MTNL)—Literally, the “Great Cities” telephone company, MTNL ( was established on 1 April 1986 to provide local telecommunications services in Mumbai and New Delhi. MTNL is a public sector company subordinate to the Telecom Commission under the jurisdiction of the Ministry of Communications; however, 20 percent of the stock was listed on public stock exchanges during 1991-92. MTNL has applied for a license to become an Internet service provider (ISP).

Text Box:  National Centre for Software Technology (NCST)—The NCST ( is a DoE research center in a northern suburb of Mumbai. It was the first ERNET member organization to establish an international connection to the Internet, and is the .in national top-level domain (TLD) manager (i.e., NCST is the registrar for the .in TLD).

National Informatics Centre (NIC)—The NIC ( was established in 1975 by the Planning Commission to act as a centralized source of information and services for the government. It has since extended its coverage to include state and district governments and public sector companies and societies. The NIC also provides computer training and consulting services, and develops software for government applications. The center’s nationwide computer network, NICNET (, is one of the largest very small aperture terminal (VSAT) networks in the world, offering X.25 and IP packet switched communications, with a gateway to the Internet via VSNL.

Text Box:  Software Technology Parks of India (STPI)—STPI (, another DoE autonomous society, was established in 1986 as part of a concentrated effort to boost export earnings from software development and related professional services. These parks offer a full-service “incubator” environment for entrepreneurs and small companies. Services offered include office spaces at affordable rates, equipped with stable electrical power supplies and international communications links. STPI also offers a wide variety of business services and acts as a single point of contact for companies dealing with the government. The concept was the brainchild of Dr. N. Sheshagiri, Director-General of the National Informatics Center, and N. Vittal, at that time the Secretary of the DoE, both of whom serve on the National Task Force on Information Technology and Software Development, the current effort to boost the IT sector once again.[16]

The first Software Technology Park was set up in Bangalore (STPB). Additional DoE parks were subsequently established in Bhubaneshwar, Gandhinagar, Hyderabad, the NOIDA zone near New Delhi (currently headquarters of STPI), Pune, and Trivandrum. The state governments of Rajasthan and West Bengal set up similar parks in Jaipur and Calcutta, respectively.[17] The program is currently being expanded to include Chennai, Indore, Mohali, and Mumbai, with another seven sites under consideration. The STPI as a whole is self-financing (i.e., receives no support from the Union budget), and each park is set up as an independent cost center.[18]

Text Box:  Telecommunications Regulatory Authority of India (TRAI)—The TRAI (which, like the DoT, does not have a Web site or home page) is also subordinate to the Ministry of Communications but reports to the Parliament. It was created in March 1997 as part of India’s effort to qualify for World Trade Organization (WTO) membership by creating a separating regulatory body. Under the current arrangement, the Ministry sets policy, which is implemented by the DoT, VSNL, and other telecommunications operating companies under the supervision of the TRAI. There has been significant contention between the TRAI and DoT over the scope of the TRAI’s authority.

Videsh Sanchar Nigam Ltd. (VSNL)—VSNL ( is the monopoly international telecommunications service provider, having been established as a public company in 1986. A majority of the company’s shares are owned by the Government of India. VSNL had a market capitalization of Rs 98 billion (US$2.4 billion) as of the end of 1996.[19] Like MTNL, the company is subordinate to the Telecom Commission. Headquartered in Mumbai, VSNL has 12 branches with international communications gateways (Table 13). All gateways have satellite earth stations; the gateways in Chennai and Mumbai are also connected to international submarine cable systems, such as SEA-ME-WE 2 and 3 and FLAG. Although there is no branch office in Cochin, there is an additional SEA-ME-WE 3 landfall there.

Table 13. VSNL Gateways









New Delhi






It is the only commercial ISP in India, offering public Internet access via the Gateway Internet Access Service (GIAS) (, as well as providing the international links to the Internet for the ERNET and NICNET.

Telecommunications Regulation

Text Box: Member
Text Box: Member
Text Box: Member
Text Box: Member

All civil and commercial telecommunications in India, except for radio and television broadcasting, fall within the purview of the Ministry of Communications and the Telegraph Act of 1885. The Ministry exercises its authority through the Telecom Commission, comprising a chairman and four members to oversee services, technology, finances, and production (Figure 3). Each of these members effectively controls the operations of one or more public companies. Until recently, all telecommunications services were provided exclusively by three public sector companies: VSNL, DoT, and MTNL. VSNL still has a monopoly on international communications, although that monopoly is being challenged. Basic domestic telecommunications are supplied principally by the DoT and MTNL, although a second landline carrier has been licensed in each of 20 telecommunications “circles.” Mobile services—paging and cellular telephony—are provided by licensed private companies, although MTNL is attempting to create a cellular service in its areas of operations.













Figure 3. Composition of the Telecom Commission

(In addition to the three public-sector telecommunications operating companies, the Telecom Commission oversees the activities of the three public telecommunications sector industrial companies: Hindustan Teleprinters Ltd. (HTL), Indian Telephone Industries Ltd. (ITI), and Telecommunications Consultants of India Ltd. (TCIL). HTL manufactures mechanical and electromechanical printers, ITI manufactures switching and transmission equipment and subscriber terminals, while TCIL specializes in installation and maintenance.)

Preparations for entry into the World Trade Organization (WTO) required the communications ministry to separate the regulatory and operating functions, with a view toward the eventual privatization of the services sector. As a result, the TRAI was created. Its powers are enumerated in The Telecom Regulatory Authority of India Act, 1997, of 28 March 1997. Although the Act gives the TRAI broad powers to make technical, operational, and licensing recommendations, and generally “facilitate competition,” there does not appear to be any clause that requires any other government agency to actually seek or comply with the TRAI’s recommendations. Further actions in preparation for WTO membership include the corporatization of the DoT[20] and eventual public sale of majority stakes in the three operating companies.

The scope of the TRAI’s powers was recently decided in a judicial dispute between the Authority and the DoT. The DoT had taken several actions in late 1997 and early 1998 that were questioned by various private sector companies and trade groups that filed formal petitions with the TRAI. On this basis, the TRAI issued orders staying DoT’s actions and requiring the DoT to first seek the TRAI’s recommendations and then comply with them. The DoT petitioned the High Court on the grounds that TRAI had exceeded its authority. In July 1998, the High Court ruled in favor of the DoT,[21] effectively undercutting the TRAI and calling into question India’s entire telecommunications regulatory regime.

The ruling cleared the way for the licensing of private Internet service providers (ISP), because the issue of DoT’s authority to establish licensing requirements for ISPs was one of the three questions at issue in the court proceeding. DoT had originally announced its general Internet licensing policy, including its intention to license an unlimited number of applicants nationwide, on 5 November 1997. The same day, MTNL announced that it was establishing a new division for the purpose of offering Internet services. The licensing specifics were announced by DoT on 15 January 1998, and applicants were invited to purchase the application forms. The following day, the E-mail and Internet Services Providers Association (EISPA) petitioned the TRAI to interdict the DoT policy, which its members thought was too restrictive. (The DoT had apparently not consulted with the Association in establishing the licensing procedures. This fact was probably more important than any questions about the actual procedures.) The TRAI heard EISPA’s petition on 19 January, and issued an order on 17 February requiring the DoT to stop selling license applications and seek TRAI’s concurrence before announcing a new Internet policy. The DoT then petitioned the High Court, seeking to reverse TRAI’s order. On 20 March 1998, the High Court declined to rule on the case, but issued an order allowing DoT to sell applications “at risk” while the Court reviewed the case, which was ultimately settled in DoT’s favor in mid-July.

Networks in India

A Brief History

Following early developments in local and, later, wide area networks (LAN and WAN, respectively), India has made only limited progress in deploying modern digital networks, notably fiber optic backbones and IP-based networks. Despite the significant presence of Indian companies on the Worldwide Web (WWW) and the large number of Indian Internet users worldwide, the Internet has neither been well-developed nor effectively used in India. The country is poised, however, on the brink of major policy shifts that are likely, if made, to facilitate the rapid growth and diffusion of IP-based networks connected to the Internet.

The organizations currently operating IP-based networks in India with Internet connections are the ERNET India society, the National Informatics Centre, Software Technology Parks India, and Videsh Sanchar Nigam Ltd. There are a number of “legacy” networks operating in India, most of which foresee converting to IP once the regulatory environment has stabilized. Table 14 presents the time-line of networking development in India.

            “Legacy” networks and their evolution

After about ten years of developing computer awareness in the public sector and establishing the basis for computer support throughout the government and academia, the Indian government initiated three wide-area computer networking schemes in 1986/7: INDONET, initially an Systems Network Architecture (SNA) network to serve the country’s hundreds of IBM mainframe installations; NICNET, a nationwide VSAT network for public sector organizations; and ERNET, to serve the academic and research communities. VSNL also initiated several wide-area networks (WAN) during the 1980s. All of these networks now offer gateways to the Internet; most have either converted to the Internet Protocol suite or are in the process of conversion.

INDONET—CMC Limited ( was established in October 1976 as the Computer Maintenance Corporation Limited, a Government of India enterprise, for the purpose of taking over responsibility for maintenance of approximately 800 IBM India installations throughout the country. IBM India announced its decision to retire from the Indian market in November 1977,[22] its assets having been effectively nationalized under the emergency powers invoked by then-Prime Minister Indira Gandhi (the “IBM Go Back” initiative).[23]

Initially set up to maintain and operate IBM mainframe installations, CMC branched out into the areas of computer education, software development, and turn-key projects in 1984. The company established the country’s first nationwide SNA network, INDONET, in 1986, using lines leased from the Department of Telecommunications (DoT), the government’s local and domestic long-distance (STD) telecommunications monopoly.[24] The network was subsequently up-graded to the X.25 packet-switching protocol.[25]

Table 14. Indian Networking Time-Line

March 1975 -

-  NIC established

October 1976 -

-  Computer Maintenance Company (CMC) established



1978 -

-  CMC takes over former IBM India maintenance operations



1980 -

-  NCST developed/deployed proprietary e-mail software for LANs



1982 -

-   NCST established indigenous, proprietary VSAT[26] network

-   Experimental 32 Kbps packet-switched network, COMNEX, connected Ahmedabad, Mumbai, and New Delhi.



1986 -

-  INDONET X.25 network commissioned by CMC

   ERNET project initiated


   NCST established first inter-campus e-mail link (NCST to IITB[27])

1987 -

-  NICNET (first nationwide VSAT network) established


   District Information System (DISNIC) program established by NIC

1988 -

-   NCST established first e-mail link with the USA

   VSNL commissioned Gateway Packet Switching System

1989 -

-  NCST connected to I-NET/X.25 via dial-up connection


   NCST connected ERNET to the Internet via UUNet Technologies


   IndiaLink established to serve regional NGOs[28]

May 1989 -

-  NCST registered as the .in domain manager

1990 -

-  NCST established leased line to I-NET

1991 -

-  VSNL introduced Gateway Electronic Mail Service

   Election results disseminated in near real-time via NICNET

1992 -

-  VSNL introduced 64 Kbps leased line service

   NCST up-graded I-NET leased line to 64 Kbps[29]

1993 -

-  VSNL introduced EDI services



August 1995 -

-  VSNL started offering commercial Internet access[30]





April 1998 -

-  ERNET reconstituted as an independent “society”

Text Box:  
Figure 4. INDONET Infrastructure
Today, INDONET connects eight cities via 64 Kbps leased lines. The entire network is backed up by redundant links provided by VSNL’s X.25 service, I-NET. Figure 4 depicts the current network. Today, one of the main services offered by INDONET is X.400 for electronic data interchange (EDI) and e-mail, with gateways to the global Internet in Calcutta and Mumbai. CMC is in the process of adding connections to Lucknow and Vizag, providing additional links via the DoT’s High-speed VSAT Network (HVNET), and up-grading the network to TCP/IP.[31] CMC has submitted a license application to become a commercial Internet Service Provider (ISP).

NICNET—In 1987, the NIC commissioned the country’s first nationwide VSAT network, NICNET, to provide data communications for government agencies. The network links the national capital with all state and territory capitals and 440 of the country’s 531 district headquarters. The main processing center is located at NIC’s headquarters in New Delhi, and there are regional processing centers in Bhubaneshwar, Hydera­bad, and Pune. NICNET’s services include e-mail, remote database access, data broadcasting, EDI, and the Emergency Communication System.[32] The network is also the backbone for pro­prietary government networks (“closed user groups”), such as those of the Election Commission, Steel Authority of India Ltd., Indian Farmers Fertilizer Cooperative Ltd., Nathpa Jhakri Power Corporation, Central Excise, and the Post Office.

One of NICNET’s more interesting innovations was the creation and deployment of a rural development information system targeted at illiterate farmers. The system was distributed to rural development offices on CD-ROM, and provides pictorial and oral information about government assistance programs. NIC has also integrated a geographic information system ( into its services and is establishing a nationwide land records management system.[33] Other representative NICNET services and projects are listed in Table 15.

In each district, a Systems Analyst has been appointed the District Informatics Officer. With the help of a District Informatics Assistant, he functions as the “ADP department” for the district. These personnel account for approximately one-third of the NIC’s staff.[34] The NIC and NICNET are funded by involuntary contributions from each state and district’s budget. These contributions amount to 2-3 percent of each administration’s budget and are levied in lieu of each organization having its own ADP budget and organization. NIC’s annual budget is approximately Rs 140,000 crore (US$34.5 billion).[35]

Table 15. Representative NIC/NICNET Projects and Services[36]

Central Budget processing

Computerized Rural Information Systems Project (CRISP)

Regional Passport Office

Fertilizer Distribution

Small Scale Industries Census

Treasury Accounting

Census 1991

State Bank of Travancore

Central Excise Computerization Project


Patent Information Services

Computer-Aided Paperless Examination System (CAPES)

Biomedical Information Services

District Information System (DISNIC) Program

General Information Service Terminal (GISTNIC)

ADONIS Bibliographic Information Services

                Teletext Application Systems:   Indian Airlines, Air India, Press Trust of India, Northern Railway,

                                                                        Over-the-Counter Stock Exchange

The network was originally commissioned using the X.25 packet-switching protocol, and C-band VSAT links remain X.25, although some organizations run IP over the X.25 portion of the network. Ku-band satellite links use IP.[37] The master earth station, in New Delhi, uses an Equatorial MC-200 13m antenna for C-band communications via INSAT 1-D (E). The master earth station transmits multiple 5 MHz-wide, 153.6 Kbps data streams. Code-Division Multiple Access (CDMA) technology is used to maximize the network’s efficiency. The network’s 450 remote earth stations use 1.8m dishes, up-linking data at 1200 or 9600 bps and receiving a 19.2 Kbps down-link.[38]

NIC is up-grading the network to the “NICNET Info Highway,” a Ku-band overlay network which provides 1 Mbps data communications via single-channel per carrier (SCPC) satellite links. These links are being established to 70 “economically and commercially important cities/towns,” and can be further up-graded to 2 Mbps. Local area networks connected to this service use 2 Mbps wireless communications. The 7m hub earth station is collocated with the C-band antenna in New Delhi. Remote sites, of which there currently are about 400, use 1.8m or 2.4m antennas.[39]

Also operating in the Ku-band is a government video-conferencing network that connects 25 centers to support the Chief Ministers of the states, the Prime Minister’s office, and the various Union ministries. The service uses a single 72 MHz transponder.

Although the NIC favors the X.400 protocol due to its inherent security features, there have been problems interconnecting individual X.400 networks to provide wider connectivity, and the NIC believes that the Internet (i.e., IP protocol networks) provide the most cost-effective basis for a national information system. One candidate for development into a universal access data network is the Post Office’s computer network, which currently handles only back-office operations. The network could be expanded to handle individual communications because the Post Office already has a nationwide network of facilities with trained staff and electricity and a robust infrastructure. And, people are used to relying on the Post Office for written communications (e.g., mail, telex).[40]

One of the applications that is being converted to an IP network using Web (browser) and SMTP (e-mail) access is EDI, because establishing and maintaining closed business user groups, termed “communities,” over an IP network is less expensive and easier to interconnect than using proprietary EDI software. The most significant problem being faced in the course of this conversion process is encryption. Currently, NICNET relies on the Secure Socket Layer 2 (SSL2) standard for encrypting sensitive data using approximately 200 server certificates. Given the insecurity of SSL2, NICNET would like to up-grade to SSL3. However, they estimate that they would require millions of certificates, and there is no certifying authority in India. NIC has therefore proposed that it be established as a certifying authority for Indian servers. In the mean time, the bulk of sensitive data, principally financial transactions, will continue to be transmitted over the X.400 network using proprietary encryption techniques.[41]

VSNL Networks—Since Videsh Sanchar Nigam Limited ( is licensed only for international telecommunications, all of its network offerings are prefixed with the title “Gateway,” regardless of whether the subscriber uses them for international or domestic communications. In theory, VSNL only offers gateways to other countries, not domestic services.

VSNL operates the Global Packet-Switched Service (GPSS), an international packet-switched service using the X.75 protocol at speeds up to 64 Kbps.[42] The GPSS network comprises three Packet Switching Exchanges (PSE) in Mumbai, New Delhi, and Calcutta, with high-speed interconnections as depicted in Figure 5, and packet assembler-disassembler switches in Bangalore, Chennai, Trivandrum, and at the Software Technology Parks (STP) in Bhubaneshwar and Pune. The network supports the ITU-T X.3, X.28, X.29, X.25, X.75 and X.121 protocols. The GPSS can be accessed directly via dial-up (X.28) or leased lines, or via links to DoT’s data networks. It provides connections to most foreign packet-switched networks. There is also a gateway to the Internet, supporting text communications (i.e., shell access).

The Gateway Electronic Mail Service (GEMS 400) is an X.400 international e-mail network. The GEMS Message Handling System has nodes in Bangalore, Calcutta, Chennai, Mumbai, New Delhi, and Pune. Subscriber access is via local dial-up in those six cities and via I-NET from elsewhere in the country. There is an e-mail gateway between GEMS and the Internet. GEMS can also be used to send Telex messages and facsimiles.[43] Figure 6 depicts the system’s direct connections.

VSNL offers international EDI services via its Gateway Electronic Data Interchange System (GEDIS), or GEDIS Trade*Net. GEDIS uses industry-standard INSTRADANET software to provide secure data communications using the EDIFACT (EDI for Administration, Commerce, and Transport), UN Trade Data Interchange (UNTDI), and ANSI X.12 standards. GEDIS nodes are located in the same six cities as GEMS. Direct international connections are available to MCI, AT&T, and Sprint EDI networks, Singapore Network Services, and General Electric Information Services.[44]

Figure 5. The GPSS Network Infrastructure

VSNL also markets Concert plc.’s Concert Packet Services in India. Concert is an international consortium centered on BT (formerly British Telecom). Access nodes supporting X.25 ASYNCH and SDLC, BSC, SNA, and SDLC are located in Bangalore, Calcutta, Chennai, Mumbai, and New Delhi.[45]

More recently, VSNL signed a national data carrier agreement to market Global One services, including Global Frame Relay, Global LAN-to-LAN, and Global X.25, in India. Managed network nodes were established in Bangalore, Mumbai, and New Delhi, providing high speed connections to Global One’s 1,400 points of presence worldwide.[46] Global One is a joint venture of Sprint, Deutsche Telekom, and France Telecom.

DoT Networks—The DoT offers domestic satellite communications services through the High-speed VSAT Network (HVNET), as well as nationwide packet-switched services via the India Network (I-NET). Remote access for data communications is provided by the Remote Area Business Message Network (RABMN).

Figure 6. GEMS International Connectivity

The I-NET packet-switched public data network (PSPDN) uses the X.25 protocol and has nodes in eight cities: Ahmedabad, Bangalore, Calcutta, Chennai, Hyderabad, Mumbai, New Delhi, and Pune. Connections to GPSS are available in Bangalore, Calcutta, Chennai, Mumbai, New Delhi, and Pune. There is also a gateway to the Internet which is designed to handle primarily e-mail and text communications (i.e., shell access).

In early 1998, the DoT announced a new category of private network, Broad User Group (BUG) Data Networks. BUG Data Networks are essentially virtual private networks created through the interconnection of two or more private networks. A BUG can be set up on the basis of INET or leased line access from the DoT. One of the first organizations to take advantage of this new network category was SITA (Société International de Télécommunications Aéronautique), an international cooperative that operates a global network primarily serving the air travel industry.[47] SITA has been offering public networking services on a commercial basis since 1995.

The RABMN is interconnected to the GPSS network at Mumbai. It is also possible to access the Internet via the RADMN for text communications.

E-Mail Certain value-added services, including e-mail and the operation of private networks, were liberalized in 1995. There were eleven non-Internet-based e-mail service providers (Table 16) and 13 closed user group (CUG) VSAT network operators in India (Table 17) as of late 1995. An additional five VSAT network proposals pending at that time.[48]

Table 16. E-Mail Services Licensees

Archana Telecommunication Service.

Global Telecom Service Ltd.

Swift Mail Communications Ltd.

CMC Ltd.

C.G. Graphnet Pvt. Ltd.


Dataline & Research Technology

ICNET Pvt. Ltd.

Wipro BT Telecom Ltd.

Datapro Information Technology

Sprint RPG



Table 17. Closed User Group VSAT Network Operators

Amadeus Investments & Finance

Hughes Escorts Communications

Rama Associate

Comsat Max


RPG Satellite Communications

Dataline & Research Technologies (I)

MARCSAT Communications

SATNET Communications

HCL Comnet Systems and Services

Punjab Wireless & Systems


Himachal Futuristic Communications



            ERNET brings the Internet

The Education and Research Network (ERNET) was established by the DoE in 1986 as a multi-protocol network with seven other government organizations: NCST; the Indian Institute of Science (IISc), Bangalore; and five IITs, in Chennai (Madras), Kanpur, Kharagpur, Mumbai, and New Delhi. The project received technical and financial support from the UN Development Program (UNDP). ERNET initially handled TCP/IP and OSI-IP traffic, but was converted to all-TCP/IP in 1995. The goals of the project were to set up a nationwide computer network for the academic and research communities, conduct research and development in computer networking, and provide networking training and consulting services.[49]

During its first two years, the ERNET project was engaged in planning the development of a nationwide academic network and evaluating software and hardware systems. The Unix operating system was selected as the basis for the network because it was inexpensive, most of the existing Internet software was supported, and technical assistance was widely available.[50] During this time, NCST established the first inter-city (with Bangalore) and international (with the United States) electronic mail (e-mail) links, in 1987 and 1989, respectively.

The first connection to the global Internet, a 9.6 Kbps UUCP link between NCST and UUNet Technologies in the United States, was established in February 1989. It was up-graded to a 9.6 Kbps leased line and full TCP/IP connectivity by the end of 1989. NCST’s domestic connection at that time comprised a dial-up link with VSNL’s I-NET X.25 packet-switched network, later up-graded to 9.6 Kbps leased lines connecting Bangalore, Chennai, Mumbai, and New Delhi. Access was via Trailblazer modems which were capable of supporting 9.6 Kbps links only with other Trailblazers; connections with other types of modems were usually at 2,400 bps.[51] The international link was up-graded to 64 Kbps in 1992. The terrestrial network was later augmented by a VSAT satellite network deployed by ERNET in 1994.[52]

Largely because it established the first domestic Indian node on the Internet, the NCST was designated the .in national top-level domain (TLD) manager.

Status of the Internet

Estimates vary greatly, but it is apparent that the Internet is widely used in India. According to Dr. S. Ramani, the Director of NCST, there are a total of about 312,000 “Web-level” users,[53] but other estimates run as high as 400,000 users.[54] There is also a large but undetermined number of electronic mail users without full Internet connectivity. There are about 1,000 Indian companies with off-shore Web sites in addition to the domains/servers located in India.[55] Table 18 shows the approximate growth of the .in domain over the past six years.

Table 18. Growth of the .in Top-Level Domain[56]








Annual Host Growth Rate


July 1992






January 1993




        1,217 %


July 1993




             39 %


January 1994




             25 %


July 1994




           129 %


January 1995




             14 %


July 1995




             80 %


January 1996




             22 %


March 1996






July 1996




           176 %


January 1997




             44 %


March 1997






July 1997




             53 %


January 1998




             50 %


May 1998






July 1998




             45 %


Today, the ERNET’s infrastructure comprises landlines within metropolitan areas and VSAT links between cities. The network comprises eight “backbone sites” (Table 19) and 104 VSATs (Table 20), based on Hughes Network System (HNS) technology. The network hub, located in New Delhi, can maintain communications with each of five VSAT remote sites on  each of 24 outbound channels. The total up-link bandwidth at the hub is 512 Kbps. The inbound links from the VSATs are time-division multiplexed into groups of 10 stations operating at an aggregate bandwidth of 128 Kbps. The system uses an INSAT-1D[57] 22 dBW C-band transponder that supports one outbound link and 11 simultaneous inbound (VSAT to hub) links. The network uses the X.25 protocol as the carrier for TCP/IP traffic. The X.25 carrier is required because the VSAT network’s space segment uses a proprietary HNS protocol incompatible with TCP/IP.[58] There are seven connections to the Internet via VSNL international gateways, of which five operate at 2 Mbps (Table 21). The ERNET supports approximately 80,000 users at 700 organizations, carrying more than 10 GB of traffic daily.[59] Approximately 12,000 ERNET subscribers are “serious” users who log on every day and use the Internet extensively. There are an additional 20,000 who use e-mail only.[60]

Table 19. ERNET Backbone Sites[61]

Department of Electronics (DoE), New Delhi (Delhi)

National Centre for Software Technology (NCST), Juhu, Mumbai (Maharashtra)

Indian Institute of Science, Bangalore (Karnataka)

Indian Institute of Technology Madras (IITM), Chennai (Tamil Nadu)

Inter-University Centre for Astronomy and Astrophysics (IUCAA), Pune (Maharashtra)

Variable energy Cyclotron Center (VECC), Calcutta (West Bengal)

Indian Institute of Technology, Kanpur (Uttar Pradesh)

Central University, Hyderabad

In April 1998, the group of people who established and were running the ERNET successfully lobbied the government to establish “ERNET India” as an “autonomous society” under the Department of Electronics. Table 22 lists the Governing Council of ERNET India. In June 1998, ERNET India became a member of the Internet Society (ISOC) in the start-up category.[62]

Table 20. Principal ERNET VSAT Nodes[63]


Number of



Number of




Kodai Kanal
























New Delhi



















































Table 21. ERNET Gateways to the Internet[64]



DoE, New Delhi (Delhi)

   2 Mbps

Software Technology Park, Bangalore (Karnataka)

   2 Mbps

VECC, Calcutta (West Bengal)

   2 Mbps

NCST, Juhu, Mumbai (Maharashtra)

  64 Kbps

NCST A-1 Building, Mumbai (Maharashtra)

256 Kbps

IUCAA, Pune, (Maharashtra)

   2 Mbps

IITM, Chennai (Tamil Nadu)

   2 Mbps

Other groups with a similar legal status include the NCST, Centre for Development of Telematics (C-DOT), Centre for Development of Advanced Computing (C-DAC), and Software Technology Parks of India (STPI).

This moves ERNET out of the Information Infrastructure Division of the DoE, and coincidentally establishes it as an independent budget center. Although the Society has been officially established, it is still in the organization phase. Finances, operating principals, offices (they have been asked to vacate their spaces in the DoE headquarters building), and staffing are all being worked out. The 30-40 DoE employees who are currently attached to ERNET will be given the opportunity to transfer to Society employment, although few are expected to do so because they would have to relinquish their civil service benefits.[65]

Table 22. The Governing Council of ERNET India[66]


Minister of State for Electronics

Chairman (Alternate)

Minister of State for Science and Technology


Secretary, Department of Electronics


Secretary, Department of Science and Technology


Science Advisor to the Defense Minister and

      Secretary, Department of Defense Research and Development


Secretary, Department of Scientific and Industrial Research


Secretary, Department of Space


Secretary, Department of Atomic Energy


Finance Secretary


Secretary, Department of Education


Chairman, Telecom Commission


(one of the Directors of an Indian Institute of Technology)


Director, Indian Institute of Science


Executive Director, ERNET India


(“two experts in the area of computer networking”)


(“two persons from the industry/user community”)

Money was the main issue behind the creation of the ERNET India society. ERNET was originally funded by the UNDP, with some additional funding from the Union government, but the UNDP funding ran out in 1995, by which time the UNDP’s Terminal Evaluation Team had recommended that ERNET be set up as an autonomous body. ERNET has been limping along for the past two years on a “bridging” grant from the Union government while people decided what to do with it. As of last year, it even looked as if ERNET might be shut down. ERNET is theoretically to be supported by its customers, but it is nowhere near being self-sufficient today.

Although ERNET’s existing subscribers do not pay for the service, ERNET hopes to become financially self-supporting by attracting new, paying subscribers and offering additional services to existing subscribers, for a fee. The nation’s 8,000 colleges and primary and secondary schools are viewed as ERNET’s natural market, which is virtually untapped. ERNET also intends to compete with NIC for business from commercial and government research laboratories, where ERNET has an early lead. They also intend to market ERNET services to government branches and departments, currently NIC’s almost exclusive domain (with the exception of ERNET’s sponsor, the Department of Electronics). ERNET’s strategy in this regard is to price its services lower than those of any other ISP, which will “automatically” win it government contracts, which are obliged to go to the lowest bidder. Finally, ERNET intends to market its services to non-government organizations (NGO) and individuals.[67] Table 23 is the proposed fee structure for ERNET Internet services.

Table 23. Proposed ERNET Internet Fees[68]


Annual Fees

Unlimited dial-up

Rs       10,000  (US$246)

Additional mail box (e-mail address)

Rs         5,000  (US$123)

Analog leased line

Rs     110,000  (US$2,700)

64 Kbps leased line

Rs     310,000  (US$7,635)

2 Mbps leased line

Rs  2,510,000  (US$61,823)

Wireless link

Rs     510,000  (US$12,562)

While ERNET pioneered the Internet in India, it is not clear that it will survive much longer. Despite its new status as a Society, as noted above, serious budget and personnel issues remain to be resolved. The Indian government has allocated only minimal funding to ERNET since its inception; most of the network development was funded by the UNDP. Today, it is expected to operate on a commercial basis when none of its existing clients pay for the services. In September 1998, the ERNET society was dealt another blow when the founder and most vocal supporter of ERNET, Dr. Ramakrishnan, was relieved as Executive Director of ERNET India by the newly-appointed Secretary of the DoE, Ravindra Gupta. The society’s new Executive Director is Gulshan Rai, who is not well-known in the networking community. The prospects for the survival of ERNET appear to be at their bleakest ever. Should the society be shut down, it is possible that the NIC might absorb ERNET’s assets and keep the network operating, although this is likely to be accompanied by some serious political in-fighting, as the NIC does not fall under DoE’s purview. Even though the DoE does not appear enthusiastic about the ERNET, it will probably not give away the assets willingly.


Although an independent agency with its own unique mission, the National Centre for Software Technology (NCST) has played a critical role in the development of the Internet in India. NCST was the first institution in India to establish an international connection to the Internet, and acquired along with the connection the responsibility for managing the .in national TLD, since they established a root-server and the first .in domain ( During subsequent government reviews, NCST’s management of the TLD has not been questioned.

NCST does not charge for registering domains under the .in TLD, but only about 400 domains were registered as of June 1998. This is partly due to the strict conditions that NCST puts on the assignment of domain names. In order to register a particular name, the applicant must produce either a company registration form or trademark registration that proves that the company is entitled to use the name for which it is applying. The NCST’s reasoning is that domain names “apparently” have commercial value, so NCST should attempt to adhere to such Indian law as might be seen to apply (i.e., trademark law).[69] A possibly unintended result of this policy is that companies wishing to register snappy names, such as indiagate, indiaweb, etc., wind up having to go offshore—to InterNIC—since their companies don't “own” those names. This policy has raised the hackles of the Internet community in India, which believes companies should be able to pay a nominal fee and register any unclaimed domain name.

NCST also does not activate domain names just to keep others from using them. For example, when VSNL set up a subsidiary called VSSL to handle its Internet business, it wanted to do business under the name, but also wanted to register to prevent anyone else from using it. NCST registered both names, but did not assign the .co domain an IP number/block or publish its registration. That is, the name is now blocked out in NCST's database, but not a “registered” domain name. While NCST is being very parsimonious with its IP address space for no apparent reason, on the other hand, it is “not selling fake real estate.”[70]

NCST is currently consulting on the establishment of a nationwide banking network under the aegis of the Institute for Development and Research of Banking Technology (IDRBT), on the governing council of which NCST has a seat. This network will be centered on a Hughes Network Systems (HNS) hub in Hyderabad that will be available to all of the country’s 105 banks, although only a few of the majors have committed to using the system.


As previously noted, parts of NICNET currently use IP, and NIC is expanding its Web-based service offerings. Since 1995, NICNET has offered Internet access via VSNL gateways in the four “metros” (Calcutta, Chennai, Mumbai, and New Delhi) and Bangalore and Pune.[71] The NIC also maintains Web pages for its government clients. By early 1998, high-speed Internet access was available throughout the network through the use of one of three new VSAT types: FTDMA,[72] DirecPC, and IP Advantage. The FTDMA and DirecPC earth stations are receive-only; outbound communication to the Internet are carried on normal telephone circuits. IP Advantange is a full duplex satellite communications system using Integrated Satellite Business Network (ISBN) protocols at 64 Kpbs (subscriber-to-hub) and 512 Kbps (hub-to-subscriber). The ISBN hub is located at NIC’s headquarters in New Delhi.[73] NIC is offering new subscribers Hughes Network Systems “DirecPC” earth stations for Rs 90,000 (US$2200); service costs Rs 5,000 (US$125) per year.[74] Remote stations using the C-200 VSATs have been up-graded to enable them to use the DirecPC system.[75]

NICNET does not, however, intend to become a commercial ISP, and sees the provision of Internet access as an adjunct to its service offerings. As of mid-1998, NICNET estimated that there were a total of 20,000-25,000 e-mail users on the network. Each state government maintains an SMTP server and has approximately 30 multiple-user e-mail accounts. NIC recently implemented an X.500 user directory that is accessible via the Web.[76]

The creation of Web-based EDI interfaces is seen as one of the principal growth areas for NICNET. Although these services are currently not accessible via the Internet, NIC is developing a gateway to permit companies to access NICNET’s Web-based EDI services without having a dedicated NICNET connection. The target sector for these services are exporters, who will be able to conduct transactions with the automated ports and Customs systems via e-mail (and later, Web) interfaces for Rs 500 per month, significantly less expensive than a NICNET EDI account and with no software investment and minimal training.[77]

NIC established its first Web-based information system in early 1998, an export database of agricultural and processed food products developed for the Agricultural and Processed Food Export Development Authority of the Ministry of Commerce. The system provides summary information, database access, and a directory of producers and exporters. It makes extensive use of Javascript and Java applets to display search results and animated diagrams.[78] Eventually, NICNET intends that all public-access government databases will be accessible via a Web interface and a firewall between NICNET and the Internet. In this fashion, NIC intends to become the “one-stop shopping” center for government information.[79]

Although NIC does not intend to offer commercial Internet services, as part of its mission to provide IT services to the public sector, NIC expects to assist at least some public companies that are planning on becoming ISPs. Candidates include the railroads, electrical power utilities, and oil distribution companies, all of which are seeking additional revenues from new uses for their extensive infrastructures and rights of way. NICNET has already agreed to provide the hardware and network base for a public-access Internet service to be offered by the Northern Railroad.[80]


VSNL’s first experience with the Internet was in the early 1990s when the then-Chairman, B.K. Syngal, was given an ERNET e-mail account.[81] On 14 August 1995, VSNL commence offering public Internet services via a gateway earth station and router in Mumbai that provided a single connection to MCI in the USA, essentially becoming an ISP. Local access nodes were installed in Calcutta, Chennai, Mumbai, and New Delhi, permitting connections via dial-up lines through the DoT or MTNL or an I-NET X.25 connection.[82] VSNL’s initial investment amounted to Rs 10 million (US$246,000) for a Web server and Rs 120 million (US$2.96 million) for routers, e-mail and access servers, and other equipment.[83]

Although no ISPs were licensed, VSNL characterized the service as a “gateway” service—Gateway Internet Access Service (GIAS)—that VSNL was allowed to provide under the terms of its license to operate international telecommunications systems. Only four months after VSNL’s Internet service was commissioned, the Indian government announced that VSNL would not have a monopoly on public Internet service provision, but that commercial ISPs would be licensed. However, VSNL was to have the exclusive right to connect these ISPs to the Internet internationally.[84]

Since then, VSNL has added five more international gateways (Figure 7) and increased the number of local access nodes to 11 (including the gateways). Five additional satellite gateways are to be established in the near future.[85] VSNL also established GIAS nodes at 19 additional locations and turned them over to the DoT for operation and maintenance. DoT also owns and operates the domestic IP network, which is carried over multi-purpose lines. Nodes in operation as of July 1998 are listed in Table 24. An additional 23 nodes are scheduled to be brought on-line by the end of 1998 (Table 25). Access is via dial-up lines at speeds up to 33.6 Kbps, 9.6 Kbps-2 Mbps leased lines, dial-up Integrated Services Digital Network (ISDN),[86] or other VSNL or DoT data networks.[87]

Table 24. GIAS Access Nodes, July 1998[88]

Nodes Operated by VSNL











New Delhi


Nodes Operated by DoT[90]




























13 Software Technology Parks Nationwide


                                                                                                                                           Multiple 64 Kbps                                           AT&T                                    USA

STPI                                                                                                                          Multiple 64 Kbps                                           GEIS                                      USA

                                                                                                                                           Multiple 64 Kbps                                           UUNet                                  USA




                                                                                                                                                     2 Mbps                                                     MCI                                        USA

                                                                                                                                                     2 Mbps                                                     Telecom Italia                      Italy



                                                                                                                                                   128 Kbps                                                   KDD                                      Japan

                                                                                                                                                   512 Kbps                                                   MCI                                        USA



                                                                                                                              2 Mbps + 512 Kbps + 256 Kbps                             MCI                                        USA




VSNL                                                         2 Mbps + 2 x 64 Kbps                                       MCI                                        USA

                                                                           2 Mbps                                                     Telecom Italia                      Italy

                                                                                                                                                     2 Mbps                                                     Teleglobe                             Canada

                                                                                                                                                    64 Kbps                                                                                                    Singapore


New Delhi

                                                                                                                                       2 Mbps + 3 x 64 Kbps                                       MCI                                        USA

                                                                                                                                                  2 x 2 Mbps                                                  Telecom Italia                      Italy



                                                                           1 Mbps                                   MCI                                        USA


Figure 7. International Internet Connections, September 1998

Table 25. DoT Nodes Planned for 1998[91]































At the end of 1997, VSNL/DoT had 75,000 Internet subscribers on their network. Table 26 provides a break-down of GIAS subscribers as of May 1998. The number of subscribers crossed the 100,000 mark in March 1998,[92] and had grown to about 150,000 by August 1998.[93] The subscriber base was growing by 2,000 per month in New Delhi and 3,000 per month in Mumbai. However, the total number of dial-up lines available for subscriber access in the whole of India amounted to only about 4,000 lines, an average of about 26 subscribers per access line.[94] Of the total, 1,200 lines are in New Delhi and another 1,500 in Mumbai.[95] As of May 1998, VSNL also had 252 leased-line clients. Of these, 45 were in New Delhi, with a total of 6 MB connectivity, and another 30 companies were on the waiting list there.[96]

Table 26. GIAS Subscribers by Gateway Node and Type of Service[97]




New Delhi




All India

















Leased Lines
































Also in June 1998, VSNL created a new subsidiary, VSNL Seamless Services Ltd. (VSSL), to operate four wide-area networking services: GIAS, GEMS, GEDIS, and video-conferencing. (VSNL’s other networking service, GPSS, was not included in VSSL’s charter.) The former chairman of VSNL, B.K. Syngal, announced that this move was intended to “level the playing field for value-added services” as “private service providers enter the market.” That is, this places those services that are subject to competition at arm’s length from VSNL’s core international telephony business, in principal preventing cross-subsidization or concessionary rates that might give VSNL’s services an unfair advantage.[98] GEMS and GEDIS are already subject to competition from private e-mail and EDI service operators, respectively, while GIAS will see competition from new ISPs in the near future.

VSNL and DoT have also been investing heavily in Internet-specific and -related infrastructure in preparation for the opening of the market to competition from private ISPs. For example, whenever an IP circuit average usage reaches 60 percent, the DoT doubles the bandwidth allocation for IP services on that circuit.[99] They are also in the process of rolling out a 140 Mbps nationwide fiber optic backbone,[100] although it remains to be seen how much of that bandwidth will be allocated to IP traffic, since the backbone with also carry NICNET, video conferencing, and other digital traffic.[101] VSNL believes that its dominant position in the major markets will enable it to retain a significant market share. Although VSNL itself may experience a decrease in Internet-derived revenues when competition starts, the government as a whole expects the change to be revenue neutral, since the leased lines and local dial-up circuits required by new ISPs will be provisioned by MTNL or DoT.[102] VSNL was also anticipating increased revenues from providing international Internet links for the new ISPs, but the government has decided to allow ISPs to establish independent links under some circumstances. On 26 June 1998, the Communications Minister, Sushma Swaraj, announced that private ISPs would be allowed to operate their own international gateways, subject only to clearance from the Defense Ministry.[103] The requirement for Defense Ministry clearance was not explained, but may be for coordination of frequencies for satellite communications earth stations.

Although many ISPs expect to establish an independent international communications link via satellite, the government is encouraging them to use terrestrial links instead, principally to conserve limited satellite bandwidth.[104] Companies such as Sprint and MCI own capacity on several of the international submarine cables that connect to India, and could conceivably offer competitive terrestrial links from their gateway cities, Chennai and Mumbai. VSNL itself is girding up for competition. In addition to the capacity it already has on the SEA-ME-WE II and FLAG submarine fiber optic cable networks,  VSNL has invested US$60 million in SEA-ME-WE III, which will come on-line in December 1998, as well as several regional submarine cables, such as the South Africa Far East (SAFE) network. VSNL has also signed the Memorandum of Understanding (MoU) for Project Oxygen, principally for its potential to boost VSNL’s Internet connectivity. Project Oxygen, still in the planning and early financing stages, plans on installing 158,000 km of submarine fiber optic cable with 101 landing points in 74 countries,[105] making it almost six times larger than SEA-ME-WE III, currently the largest international cable network. Project Oxygen plans on using asynchronous transfer mode (ATM) as the Layer 2 transport protocol, and VSNL is planning on installing a compatible domestic fiber optic backbone.[106]

VSNL prohibits the use of the Internet for voice communications (Internet telephony or voice-over-IP) or facsimile transmission[107] for economic reasons, although there is also a valid legal constraint. Economically, VSNL’s profits derive principally from international voice traffic. Any diminution of this toll traffic due to the use of flat-rate Internet communications would not only adversely affect VSNL’s profits, but would reduce the amount of foreign exchange that VSNL earned for the Union treasury. VSNL was designed as Navratna (“Jewel in the Crown”) Public Service Enterprise because of its high profitability and consequent value to the national treasury. Thus, on purely economic terms VSNL’s ban on Internet voice and facsimile traffic is supported by the national government. Legally, VSNL has been granted the license to be the exclusive provider of international telecommunications through 2004, a monopoly that has been approved by the World Trade Organization. To the extent that Internet voice or facsimile traffic by-passed VSNL’s international toll network, such use would be a violation of the license terms and thus illegal under existing Indian law. However, a precedent has already been set, jeopardizing VSNL’s exclusivity, by the establishment of independent links to the Internet by the Software Technology Parks of India (STPI) consortium. The immediate result of competition from STPI, however limited in scope and market segment, was the reduction of the standard rate for a leased line by 67 percent.[108]

VSNL realizes that it cannot really prevent people from using Internet telephony if they really want to do so. VSNL blocks sites offering the required software and Internet telephony servers when it finds them, under the assumption that this will deter the majority of would-be users. VSNL recognizes, however, that some, probably very small, percentage of “hard core” Internet users will figure a way around the blockages, and isn’t concerned about it. For example, the Deputy Director of the National Informatics Centre has Internet telephony software installed on the computer in his office, but he isn’t using it because he doesn’t have a microphone. A company in Mumbai advertises Internet telephony explicitly in an advertisement in the Tata Yellow Pages. Once VSNL learns how to make money from Internet telephony and facsimile, they will remove the restrictions, probably without any public notice, at the same time as they begin offering those services themselves.

Although the principal reason for VSNL’s tenacious grip on its monopoly is economic, security concerns have also been cited.[109] One of the functions attributed to VSNL is the monitoring of data networks for the use of encryption. However, it is not clear that there are any legal controls on the use of encryption, and the responsibility for such telecommunications monitoring as is conducted—subject to legal controls and judicial review—rests with the Home Ministry. With respect to the Internet, is has been suggested that, without centralized control, separatist movements in India might make use of the Internet for propaganda, to garner international support for their causes.[110] While dismissing the potential for the Internet to be of much use to such groups internally, the Indian government is concerned about allowing them unrestricted access to international communications.


To provide efficient internal and international communications for its members, the Software Technology Parks of India society operates its own communications network, SoftNET. When STPB was first established, STPI spent two years attempting to get the required communications services from VSNL. As a result, STPI petitioned the government and received permission to operate a completely independent network. It has thus far been the only organization allowed to have its own international gateways (i.e., independent of VSNL). Beyond the borders of the parks, network is entirely wireless, using microwave communications (L/S-band TDMA and 1.5/2.4 GHz CDMA point-to-point links) to connect member companies in proximity to the parks and satellite communications between parks and internationally. Each park thus has its own international gateway; altogether the STPI operated 480 64 Kbps circuits in mid-1998. All of the international satellite links are with the United States (UUNet Technologies, AT&T, and General Electric Information Services/VERIO), because of the favorable rates and the fact that most of the parks’ clients’ business is with American companies.[111]

SoftNET’s services are optimized for software exporters, providing services such as e-mail, remote login and database access, file transfer, switched video conferencing. In early 1997, out of a total STPI membership of about 450 companies (“units” in STP parlance), approximately 60 STPI members were SoftNET subscribers.[112] This number had increased to about 100 subscribers by mid-1998.[113]

SoftNET’s services include SoftPOINT, SoftLINK, SoftPAC, and SoftCONF.

            SoftPOINT is a private, digital satellite link connecting subscribers directly with a client overseas at 64 Kbps. The SPTI member pays for the Indian half-circuit (i.e., between the member’s site and the satellite), while the foreign correspondent pays for the other half-circuit. STPI sets up the entire circuit, however. The connection between the STPI subscriber and the park’s gateway earth station is via multi-access radio.[114] Table 27 shows the tariffs for SoftPOINT service.

Table 27. STPI SoftPOINT Service Tariffs[115]


Annual Indian Half-Circuit Charge


Rs lakh



































            SoftLINK is a TCP/IP network with connections to the Internet internationally. Subscriber connections are via Ethernet LAN, for units located within a park, or via digital radio or dial-up landline for units located outside the parks’ premises. The network is optimized for leased-line (LAN or radio) connections.[116] Table 28 lists the SoftLINK tariffs.

Table 28. STPI SoftLINK Service Tariffs[117]



Annual Tariff


Rs lakh


Radio link







Radio link with Web access




STP LAN or leased line




Dial-up, fixed rate




Dial-up, per kilosegment


0.36 + Rs 150

885 + 3.70

One of the significant features of SoftLINK is the National Capital Region IP Network (NCR-IP), a high-speed intranet connecting STPI member units in and around Guragaon, New Delhi, and NOIDA to STPI headquarters via an Ethernet LAN and digital radio links. The network is based on PCs using Windows NT, Silicon Graphics servers using the Irix operating system, and Cisco and Network Dynamics routers. Dial-up lines are provided for the network administrators.[119]

            SoftPAC is an X.25 packet-switched service for connection with foreign public data networks (i.e., not with GPSS or I-NET). Connections are via LAN or dial-up lines, or via radio link for SoftPOINT subscribers.[120] SoftCONF is a video conferencing service available through STPB.[121] No tariff information is available for either of these services.

            Other Services and New Entrants

The preceding section summarizes the status of the currently-operating ISPs. However, a review of only the officially-recognized services fails to account entirely for the level of Internet use in India. Electronic mail and “chat” rooms/channels, especially, have flourished in a informal sector reliant upon but not directly a part of the formal Internet services. There also remain an undetermined number of bulletin board services (BBS) in India, some of which are not connected to the Internet. Finally, there is the issue of “users” vs. “subscribers.” Due to the expense of both computers and Internet accounts, most accounts are used regularly by more than just the account-holder. Estimates vary from two to eight users per account, although there appears to be general agreement that the average is about four. At the extreme, there is a purported 400:1 ratio of users to accounts on the DoT access node in Gwalior, 250 km south of New Delhi, in northern Madhya Pradesh.[122]

Hotmail is the most popular e-mail service in India, Microsoft’s service that offers free e-mail accounts funded by on-line advertising. There were an estimated 21 million Hotmail users worldwide in mid-1998, about half of whom were located outside the United States. Although Hotmail has access nodes in several countries, there are none in India. Subscribers in India must access the service through the Worldwide Web. The number of Hotmail users in India has been estimated to be 300,000 in mid-1998;[123] however, the number of Hotmail users who also have GIAS accounts is not known. A large percentage of Hotmail subscribers use others’ Internet accounts or cyber cafés to access their e-mail. Other free e-mail services, such as USAnet and Yahoo, are also used in India, but their user base is a small fraction of that of Hotmail.

Bulletin board services (BBS) remain popular in India for local information and chatting. Some have established or plan to establish links to the Internet, but a gateway is necessary, since these BBS are based on proprietary or free software and are incompatible with the Internet protocol suite.

Text Box: Pssst… Hey, buddy. Want some e-mail?
The sign says “Child Development Center,” but it is well after dark and there are no signs of any happily developing children about. It is not only after dark, but very dark indeed, since the electrical power in the neighborhood is out again (still?). But there’s a generator chugging away out front. Following the power cord, a quick check in the office confirms that the network is up. Past the darkened play room, with colorful cut-out Disney figures on the walls and toys neatly stacked away for the night, we find the classroom half-full. Eight computers are lined up along two walls, connected to each other and, we hope, the Internet by a local area network and a single modem. One computer is down, and two others are occupied by a pair of teen-aged girls snickering over their snappy responses to some boy’s e-mail. Others take their work more seriously. A few clicks and Netscape is unfolding on our screen. We’re connected! Priceless to the disconnected road-warrior, but at only 50 rupees an hour, only the search for a connection was hard to bear.
Cyber cafés are gaining popu­larity, due in large part to diffi­culties in getting Internet con­nections to work, principally due to poor or no telephone lines. It is also a way for younger people to be occasional Internet users without having to pay up front for a block of time. Up-beat press reporting suggests that cyber cafés are springing up like mushrooms and are doing land-office business.[124] Although there are now cyber cafés in Bangalore, Calcutta, Cochin, Lucknow, Mumbai, New Delhi, Trivandrum, and Varanasi, the reality is less impressive.

The two main obstacles to a thriving business appear to the be relatively high charges and the very poor connections. Although the Silicon Graphics “Indigo” workstations at one cyber café were connected to a 100baseT LAN, the very poor quality of the leased line to the GIAS, which was shared with all the host hotel’s other data communications, resulted in significant delays for sending or downloading e-mail and for Web access. Another cyber café advertises that it has 15 100 MHz Pentium computers on-line, but neglects to mention that they are connected to the Internet by another very slow line. It is not unusual for smaller operations to be connected to the GIAS via a shared modem.

Text Box: Cyber Cafés in India,
   Summer 1998114
Aurangabad	1
Bangalore	4
Baroda	1
Calangute	1
Calcutta	3
Chennai	4
Cochin	1
Goa	1
Hyderabad	2
Lucknow	1
Madurai	1
Mumbai	6
New Delhi	5
Palakkad	1
Panaji	1
Pune	3
Rajkot	1
Trivandrum	1

[125]“Informal” neighborhood cyber cafés appear to be doing better than their formal (advertised and licensed) counterparts. There are at least six businesses in New Delhi, for instance, that are registered as Internet access re-sellers. During mid-July, at least two of these businesses were virtually deserted, both during business and evening hours. At the same time, an informal cyber café in a near-by neighborhood had standing room only during a power outage. One of the big differences appears to be price: the informal café’s fee was about half that of three of the formal businesses (the fourth cyber café was located in the Sheraton Maurya Hotel, charging the hotel’s up-scale visitors, should any actually venture down into the Business Center, a suitably up-scale access fee). The smaller informal operations also featured a sense of community among the users, contrasted with the more sterile business environment of the formal businesses. In any event, for the “official” cyber cafés, the café appears to be a side venture, with the main income derived from consulting services.

A hybrid concept, a cross between a cyber café and an ISP, is the XiberClub “Internet Club” launched in Ludhiana, Punjab. The “club” is a subsidiary of—what else?—a consulting firm, Xiber Net Technologies, which was started by a non-resident Indian (NRI) who also owns the US-based ISP CyberNet Technologies. In addition to hosting a cyber café, where users are assigned unique e-mail addresses, XiberClub members have access to the Xiber-BBS, which gives them access to their Internet e-mail accounts via a local telephone link to the bulletin board service. Xiber Net Technologies is creating content for its BBS, in effect becoming a relatively low-technology Internet “portal.”[126]

ICQ has gained a large following in India, based on the popularity of chatting with the younger Internet and BBS users. The numbers of ICQ users or servers in India are not known, but are estimated to be significant (i.e., users on the order of tens of thousands). ICQ (“I Seek You”) was created by an Israeli software company, Mirabilus, and released last year. The basic program is offered free of charge and allows users to maintain address books of chat channels and partners and communicate with others in real-time via general or topical channels. The concept is very similar to America OnLine’s chat rooms, “buddy lists,” and Instant Messaging. ICQ runs in the background and, when the user logs on to the Internet, broadcasts a greeting to the users listed in the address book to let them know the user is on line. Similarly, when someone in a user’s address book logs on, the user receives a notification. Some enterprising Indians have even routed incoming ICQ notifications to their pagers, so they will be sure not to miss their friends’ on-line sessions.

Would-be ISPs abound. During the first two weeks after DoT announced that application for private ISP licenses were available, about 160 application forms were sold,[127] about half of which were from applicants seeking to offer services in New Delhi.[128] The total number of applications finally sold was not announced; there may be as many as 200 new ISPs in India before the century is out.[129] The larger companies seeking to become ISPs joined together to form an E-mail and Internet Service Providers Association (EISPA) (Table 29). These companies are generally already operating CUG VSAT networks and are looking to expand their offerings to include IP-based domestic networking as well as Internet connections. These include Global Telecom Services Ltd., which operates a 27-node nationwide private network; Satyam Infoway (P) Ltd., a division of Satyam Computers; and Sprint RPG, which claims to already have completed preparation to offer Internet connections.

Table 29. EISPA Membership, September 1998

CG Fax Services

Comsat Max ISP Division


GE Communications

Global Telesystems

HCL Comnet ISP Divison

Satyam Infoway

Sprint RPG

Wipro Communications Division

A spokesperson for the EISPA characterized 1997-1998 as “the year of the WISPs (Wannabe ISPs).” Since the association was formed in 1997, it has been active in working with and lobbying the TRAI, DoT, and, most recently, the National IT Task Force, in an attempt to work out a regulatory regime that was fair and economically feasible. One of the EISPA’s claimed successes is having convinced the DoT to reduce the leased-line fee for network services providers. Formerly, DoT charged network operators twice the retail rate, in part to make it economically infeasible for them to compete with the DoT on the open market. Starting in August 1998, the fee was reduced to the retail rate and ISPs will enjoy a rate only 80 percent that of the retail charge.[130]

Some network operators opted not to join the EISPA. Important non-members include CMC Ltd., whose network was described above; DBS Internet Services, which already offers Internet access to members of the DBS Business Center; Mahindra Network Services Limited, which operates a data network for the automobile manufacturer and retailer Mahindra (a Ford affiliate); Manipal Control Data Electronic Commerce Ltd., an affiliate of Control Data Corporation; and UUNet India Limited, which is one of the companies providing international Internet connections to VSNL. One of the more unusual entrants is Sunlight Metal Works, which hopes to branch out of heavy industry by offering Internet access and Web hosting for central east coast companies in Vijayawayda, where Sunlight is based, Guntur, Nellore, Thirupathi, and Vishakhapatnam.[131]

A typical scenario for a private network operator to enter the ISP business was provided by Satyam Infoway. Satyam’s private network is already TCP/IP-based, so no protocol conversion is required; others, such as CMC, are converting all or portions of their networks to Internet protocols. Satyam has 13 points of presence connected lines leased from the DoT that are being up-graded to multiples of T-1 on the high-traffic corridors or multiples of 256 Kbps on less-used routes. Satyam is open to alternative backbone vendors, when they become operational. The company currently connects to the Internet via VSNL, but is negotiating peering agreements with operators in Asia and North America. Subscriber connections to Satyam are via dial-up or leased lines from DoT or MTNL, but they are eager to use competitive basic access providers’ networks where feasible and are investigating the potential for VSAT or radio access, by-passing the fixed network operators altogether.[132]

            Summary—Dimensions of the Indian Internet

From an early start, through years of stagnation, Internet services in India are taking off. In true Indian fashion, the public has been “making do” through account-sharing and imaginative work-arounds, but there is clearly a large pent-up demand and public pressure for improved services. Indian companies, meanwhile, have been making up for domestic service deficiencies by establishing the Web presence overseas, usually in the United States. Table 30 and Figure 8 describe the dimensions of the Internet in India as of mid-1998.

Pervasiveness There are probably more than 300,000 Internet users in India today, less than 0.05 percent of the population. Despite the cost, lack of competition, and service problems, people are signing up for VSNL GIAS accounts at a rate of about 5,000/month in Mumbai and New Delhi alone. The current growth rate nationwide is estimated to be about 250 percent per annum. Should this growth rate continue, it will take more than two years for the Indian Internet to reach at least one person in every 1,000. Should private ISPs begin service in the near future, and the growth rate increase as predicted, 0.2 percent of the Indian population could have Internet service within three years.

However, the Internet user community has already expanded well beyond a core of networking professionals to include a wide variety of civil servants at every level of government, a small but vocal number of business people, human rights and other activists, and, inevitably, the young middle class. There are also a large number of computers connected to the Internet—more than 7,000, despite the relatively low pervasiveness.





(1) Experimental

The Internet user community comprises less than 1 person in 1,000. However, the user community extends well beyond a core of networking professionals, and there are hundreds of computers connected to the international Internet. This dimension will likely increase to 2 by 1999.

Geographic Dispersion

(2) Moderately


Internet points of presence are currently located in 14 of 25 States and 3 of the seven Union Territories (17 of 32 first-tier administrative divisions). Planned near-term expansion will connect three more States. There are international connections from at least 12 locations, six of which serve the public network.

Sectoral Absorption

(1) Rare

There is leased-line connectivity to the Internet in less than 10 percent of the constituents of every sector.

Connectivity Infrastructure


The average bandwidth of the domestic infrastructure is less than E-1 (2.048 Mbps). There are several closed and bilateral Internet exchanges. Access is predominantly via modem, but 64 Kbps leased lines are available and used.

Organizational Infrastructure

(2) Controlled

There is only one commercial ISP offering public Internet access. The legal barriers to establishing new ISPs have been eased, although the degree of competition that will be allowed remains unclear.

Sophistication of Use

(2) Conventional

The Internet is being used to improve the efficiency and expand the scope of current activities and processes without fundamentally changing them.

Table 30. Internet Dimensions for India

Geographic Dispersion Commercial Internet points of presence are currently located in 14 of the 25 States and 3 of the seven Union Territories, for a total of 17 of the 32 first-tier administrative divisions. Three more States will receive nodes by the end of 1998, providing access in 62 percent of the country’s first-tier administrative divisions. If one considers NICNET as part of this dimension, there is at least some Internet connectivity in every first-tier division (State or Union Territory) and 83 percent of the second-tier administrative divisions (Districts) in the country.

There are commercial international connections to the Internet in five other countries from six locations that also connect the research and academic communities to the Internet. These links have an aggregate bandwidth of almost 18 Mbps. Additionally, each Software Technology Park has an independent satellite link to the Internet in the United States, although these links serve only STPI member units. Altogether, SoftNET has an aggregate domestic and international bandwidth of 30 Mbps. The fact that every Software Technology Park has an independent link to the Internet gives India an unusually high number of international links relative to the extent of the domestic infrastructure and number of subscribers. However, the six links that serve the public Internet network are unable to adequately service current usage levels.

Figure 8. Indian Internet Dimensions, 1988-1998

Both the domestic geographic dispersion and number and dispersion of international links are unusually robust for the overall level of pervasiveness of the Internet in India. The physical proliferation of commercial Internet infrastructure appears to be a function of the wealth and development priorities of the various states and regions. While VSNL could be expected to build out the infrastructure first, more quickly, and more robustly in areas with high latent demand, such as the four major metropolitan areas, some states appear to have lobbied for priority to serve their own objectives. Table 31 shows the number of commercial Internet points-of-presence (POP) that will be operating in the various States and Union Territories at the end of 1998.

Andhra Pradesh, with one DoT node in operation and four more planned for commissioning this year, stands out from the rest. The only apparent reason for this disparity is the fact the Chief Minister (i.e., State governor) of Andhra Pradesh, Chandrababa Naidu, has been aggressively advancing IT development in the State in an effort to have Hyderabad supplant Bangalore (in neighboring Karnataka) as the premier high technology development and exporting center in India. Mr. Naidu is, not coincidentally, one of the Co-Chairpersons of the National Task Force on Information Technology and Software Development. In contrast, it appears that the poorest areas of the country will fall further behind, to the extent that the Internet spurs development elsewhere, since they will not be connected to the Internet until well after the more well-off regions.

Sectoral Absorption Internet use is not yet common (i.e., with more than 10 percent of a sector having leased-line connectivity) in any sector, although NICNET’s recent establishment of IP links to all remote VSATs indicates that the government is making significant strides in proliferating Internet connections. The commercial sector is making increasing use of the Internet, but the number of leased-line connections represents a small fraction of the sector; only the very largest Indian companies and foreign multi-nationals have connections. Internet use in the academic sector is still very rare, with only the premier research centers and relatively few of India’s estimated 6,000 universities on-line. The only primary or secondary schools on-line are a few private ventures. There is virtually no use of the Internet by the health sector.

Table 31. Distribution of Commercial Internet Points-of-Presence (projected)

Number of Internet POPs

Host States/Territories*





Andhra Pradesh

Locus of an aggressive Chief Minister’s efforts to spur IT development in competition with Bangalore. Said Chief Minister is a co-chairperson of the National IT Task Force.






Historically wealthy trading states with high IT awareness.







Jammu & Kashmir



Tamil Nadu

Uttar Pradesh

With the exception of Goa, states below the national averages for wealth and development. Targets of increased investment.








Himachal Pradesh

Madhya Pradesh



West Bengal




A mixed bag of also-rans in the competition for Internet development.






Arunachal Pradesh







Andaman & Nicobar Islands*

Dadra & Nagar Haveli*


The poorest, most neglected, outlying areas of India. Several have been the locus of relatively recent separatist movements; unrest continues in several.

Connectivity Infrastructure The Internet backbone in India operates at a maximum bandwidth of E-1 (2.048 Mbps) over shared communications lines. There is a mix of satellite and terrestrial circuits. The new fiber optic backbone being installed by DoT may improve bandwidth availability, but, being a 34-140 Mbps Plesiochronous Digital Hierarchy (PDH) network, even as it is being installed it is obsolescent. International links also run at a maximum speed of E-1. There are no public or multi-lateral Internet Exchanges in India; VSNL gateways are multi-homed with foreign carriers. Access methods available and in use include modems and leased lines of at least 64 Kbps. The predominant access method is via modem.

Organizational Infrastructure There is only one commercial ISP, a public sector company. The three government organizations that offer Internet access to their constituencies do not effectively compete with the state monopoly ISP. This is expected to change in the near future, since the decision has been made to license private ISPs and the legal battle between the TRAI and DoT was settled in the DoT’s favor in mid-July. There remain significant barriers to market entry in the form of ISP qualification requirements. At least 100 companies have applied to become ISPs, although VSNL believes that only about ten of these applicants are qualified.[133] Both domestic infrastructure and international connectivity are also monopolies today, but both are to be opened to competition in the near term. Organizations with existing domestic infrastructure of their own, such as the railways, electrical power utilities, and some oil companies, will be allowed to use their own networks to facilitate their own entry into the ISP market or to lease capacity to other ISPs.[134] In June, the Minister of Communications announced that ISPs would be allowed to establish their own links to the Internet, via satellite if they are to be independent of VSNL, subject only to Ministry of Defense clearance.

Sophistication of Use The two most popular uses of the Internet in India are electronic mail and “chat” (IRC and ICQ). There is also a large number of Indian companies involved in Web page design, but thus far no innovative applications or evidence of fundamental changes in processes have emerged. The Internet, to the extent that it is used today, is an extension of existing processes (e.g., use of the Web for advertising) or an enhancement (e.g., e-mail as a replacement for facsimile transmission). No new Internet applications have been developed, nor is the Internet yet being used in any innovative ways. There are efforts to make more intensive use of the Internet, such as in support of software exporting, but these are again substituting the Internet for other communications media to increase convenience and efficiency.

There are signs, however, that more extensive use of the Internet may have some far-reaching effects on the Indian government and at least some segments of society. There is a high degree of interest in politics in India, and Indian democracy is very vocal and often confrontational. Recent competitions among Web sites to be the first to post the new Union budget, host the best commentators on their chat channels, or provide the best surveys of public reaction to the budget have demonstrated the potential of the Internet to make detailed information widely available in a very short time. The very rapid and detailed comments received on the Union budget this year have given the Indian government the first taste of what might occur should Internet use spread more widely.[135] On the other hand, the efforts by the NIC to make detailed government information available and usable at the lowest levels of society, which the NIC expects to be furthered by the proliferation of the Internet, may improve standards of living, especially in rural areas.


While many determinants have made important contributions to the current situation, is has become clear that government policy has been the most important determinant in achieving current Internet dimensions, both directly and by influencing other determinants. In other countries with retarded Internet diffusion, there is significant “constituent weight” (i.e., number of constituencies weighted by their sizes and influence) opposed to the Internet. However, it appears that India might be unique in suffering from retarded diffusion in the absence of any evident opposition to the Internet. While the government bureaucracy is the most important constituent, it apparently has held up Internet diffusion for internal political reasons rather than for any substantive issue relative to the Internet itself. Table 32 lists the principal determinants of Internet development in India.

The Indian subcontinent has a long legacy of government ownership and control of the principal means of wealth generation, and this was perpetuated and codified during the Republic’s formative years as an extensive socialist structure that allowed the government to attempt to exert strong central control over development and gave the populace some sense of social equity in the face of extreme poverty as well as an employer of last resort. The government has not been able to provide an adequate standard of living for much of the population, however, resulting in a large illiterate underclass that stresses such social services as exist, especially the education and health systems, and complicates the development process. In the telecommunications sector, the legacy of state ownership and under-investment is a telecommunications network incapable of offering modern services to even the small segment of society it serves.

The most important immediate curb on Internet development has been the government’s monopoly of the telecommunications sector. Much of the early Internet infrastructure was developed in spite of the DoT’s policies and in the face of DoT resistance to innovation. Struggling as it has been to provide at least minimal services to a small fraction of the population, the DoT had no interest in investing in a wide-area computer networking technology that did not conform to international standards and, in the mid- to late-1980s, appeared to have no constituency or potential users beyond a small core of information technology specialists, principally at research institutes. The DoT’s reluctance to innovate was compounded with the mandate to be at least self-financing and preferably profitable. VSNL was certainly profitable, contributing to the Union government’s budget and foreign currency reserves, and had no intention of taking any action that might compromise that profitability. The result was the creation of a tariff regime that penalized heavy users of telecommunications, especially users of leased-lines who created their own virtual private networks. “Wholesale” prices of leased lines to these network operators were kept sufficiently above the DoT’s rate card, typically two to three times the retail price of the same service, that network providers could not economically resell service outside their own organizations.

Although licensing policy did not play a role in the lack of telecommunications development until recently, due to the exclusion of the private sector entirely, it has become an issue with the recent gradual liberalization of the telecommunications sector. Licenses, permits, and other official paperwork required to run any kind of business in India are important sources of both direct revenue and civil service employment. The resulting fees, difficulties, and delays have bred corruption on the one hand, with a bribe being the only sure path success, and retarded development on the other. The government appears to recognize this phenomenon, but does not appear to have been able to overcome it. Along with domestic constraints, restrictions on foreign investment, both direct restrictions in the case of the telecommunications sector and other restraints in such forms as unfavorable hard currency conversion and reserve policies, have effectively limited the amount of foreign capital that has been available for investment.

Table 32. Determinant Impact

Determinant Quality

Affected Dimension




State monopolization of telecom­munications

Pervasiveness—Severely limited by limited public access and cost

Sectoral Absorption—Potential users were in opposition to the DoT, which was not an early adopter of Internet technology; lack of coordination with or subsidization of other sectors, especially health and academia, has limited use

Geographic Dispersion, Connectivity Infrastructure—Deployment of Internet infrastructure has been limited by government investment priorities

Organizational Infrastructure—Limited by government policy to a few government organizations; competition planned in the near term


Tariff structure

Pervasiveness, Geographic Dispersion, Connectivity Infrastructure—Leased line tariffs are structured to put private network operators at a cost disadvantage, should they seek to re-sell service on their networks

Poor telecommuni­cations infrastructure

Geographic Dispersion, Connectivity Infrastructure—Internet use is constrained by poor telephone lines, both in the local loop and inter-city infrastructure




Human resources

Pervasiveness—Although the potential market is large, it comprises largely educated urbanites; half the population is illiterate and unable to use, much less afford, a computer

Sophistication of Use—The large base of well-educated IT professionals provides the basis for rapidly developing new and innovative services via the Internet; the prospects for the development of unique Internet-based solutions to India’s problems are good




Financial resources

Pervasiveness—The country cannot afford to develop a robust Internet infrastructure without significant private investment; more than half the population is below the poverty line (as defined by the Indian government)

Geographic Dispersion, Connectivity Infrastructure—The country cannot afford to develop a robust Internet infrastructure without significant private investment

Sectoral Absorption—Some sectors, most notably health care but also education to a lesser extent, are insufficiently funded for their basic missions, and cannot afford extensive computerization


Social equity

Pervasiveness, Geographic Dispersion—The Indian government’s commitment to universal access ensures that some attempt will be made to proliferate Internet services beyond the urban core.

Geographic obstacles to develop­ment

Geographic Dispersion, Connectivity Infrastructure—Largely rural population and varying topography makes establishment and maintenance of terrestrial links difficult


Extensive bureaucracy

Pervasiveness, Organizational Infrastructure—Competing bureaucracies have prevented the licensing of ISPs and creation of a competitive market which has, in turn, greatly slowed the development and up-take of Internet services; overly bureaucratic procedures greatly retard and discourage innovation

The other important factor underlying many other determinants is the country’s overall level of poverty. Both the official poverty and illiteracy rates hover at around 50 percent, with the poorest members of society concentrated in city slums and those not much better off largely in the rural areas. Any attempts to even maintain the standard of living in the face of rapid population growth, much less raise the standard for any sizable segment of the population are hugely expensive. Development programs compete for limited investment funds, a situation exacerbated by the government’s foreign investment rules. The telecommunication sector was recently opened to limited foreign investment, but it is not yet clear that either the government or foreign investors are fully committed. Despite an early rush to bid for licenses to offer basic local telecommunications services, a rush that led to some unrealistic “bidding up” in some areas, little progress has been made in any of the circles and several major investors have pulled out.

A direct result of both the country’s poverty level and government monopoly of the telecommunications sector is the very poor condition of the telecommunications infrastructure. Table 33 lists the telecommunications indicators for India.

Table 33. Telecommunications Indicators[136]




CAGR (%)

Low Income Countries’ Average



Mainlines (k)






Mainlines/100 capita (teledensity)






Proportion of population in largest city






Largest city’s teledensity






Waiting list






Satisfied demand






Waiting time (years)






Capacity used (%)






Percent digital






Faults/100 lines/year






Public phones/1,000 capita






Local call cost (US$)






Monthly subscription as % of GDP/capita






Cellular phones (k)






Cellular phones/100 capita






Estimated fax machines (k)






Outgoing international (M min)






Telecommunication staff (k)






Mainlines/staff member






Revenue/mainline (US$)






Revenue/employee (US$)






Investment/cap. (US$)






Investment as % of GFCF (1995)






Internet development is dependent to a great degree upon the availability of basic infrastructure, to provide links between ISPs and their clients, between Internet points of presence—both within a single ISP’s network between ISPs, and between ISPs and the global Internet. A robust Internet roll-out requires high-speed backbones and at least acceptable quality local loop connections in sufficient numbers and with sufficient geographic scope to serve the market. India’s telecommunications infrastructure today is barely capable of supporting the current level of service in those few areas where service is available. Poor quality local loop connections limit line speeds, and trunk congestion, both domestically and on international links, slows response times.

At present, the local loop appears to be the principal network impediment to Internet development. Although the network nominally operates on the world standard -48 vDC, it is not unusual to discover line voltages 25 percent or more below the norm. Many modems, especially modern high-speed models, have difficulty in detecting the carrier at these low voltages. Misconnections or failures to connect are common, requiring multiple re-dialing. Once connected, the poor line quality often inhibits the speed of the connection, regardless of the modem being used. A nominal speed of 9.6 Kbps, with an achieved through-put after error correction of less than 1 Kbps, is considered normal. Line drops are frequent.

Once past the problems with the local loop, backbone deficiencies make themselves known. The most glaring problem is in fact the lack of a national backbone. Although there are 72,000 route-km of fiber optic cable in the telephone network, the network is operated variously at 34 and 140 Mbps using PDH transmission protocols; it is thus obsolete before completion. It is also not in conformance with international standards, requiring extra time and expense to install equipment purchased from foreign vendors.[137] This limited capacity, furthermore, must be shared by all users, including voice and videoconferencing traffic. There is effectively no high-speed data backbone; such dedicated bandwidth as exists is via satellite. Domestic satellite Internet connectivity may get a boost, however, when INSAT-3 is launched some time before 15 August 1999. In his recent speech announcing the intention to launch of the satellite in commemoration of the Indian Republic’s golden jubilee, Prime Minister Vajpayee said that the satellite would feature six transponders dedicated to providing “Internet and other information and computer-based facilities” to students.[138]

A final problem that has influenced government policy and raised obstacles to development, especially with respect to high-technology infrastructure, is heterogeneity. The most obvious problem in this respect is the large number of languages prevalent in India. The constitution recognizes 14 official languages and two dozen out of almost 200 languages (in more than 500 dialects) are spoken by more than one million people each. Hindi is spoken by about 30 percent of the population, but it is concentrated in urban areas and north-central India, and is still not only foreign but often unpopular in many regions. English, the most common language on the Internet, is the lingua franca of commerce, government, and the court system, but is not widely understood beyond the middle class and those who can afford formal foreign-language education. Religious diversity, especially the sharp differences between the Hindu and Muslim communities, has complicated development, and there have been denunciations of the Internet by Muslim clerics in India, similar to those voiced (but often overcome) elsewhere in the Islamic world.[139]

Problems and Prospects

As discussed above, government policy has been the principal problem with respect to Internet development. Up until now, there appears to have been no objective reason why the Internet could not have been allowed to develop more quickly. However, with the development pace picking up and likely to take off in the near future, other concerns may be raised.

The principal diffusion driver at present is the large pent-up demand. There is a large market just waiting to be served, but demanding more and better service and largely able to pay for it. Besides demand, however, there is a broader recognition that Internet development is a key component of a larger program to boost Indian IT exports, principally in software. To the extent that the government believes that national development imperatives are being held hostage to basic infrastructure improvements, those improvements, including the Internet, should get more emphasis than could be placed on them by the market alone.

The large number of Indian expatriates, those employed overseas and students studying abroad, termed by the Indian government “NRIs” (non-resident Indians), is also likely to spur further diffusion of the Internet in India. Students in foreign institutions generally have Internet access. This makes them familiar with the technology, and perhaps somewhat reliant upon it. While studying, they seek to communicate with their families and other NRI students via the Internet, and once home, they bring their needs, expectations, and expertise with them. A significant percentage of non-student NRIs are laborers, and probably have neither the knowledge nor the ability to use the Internet. However, many of the remainder tend to be professionals or start businesses, and also seek to communicate with their families and friends in India. Many use the fruits of their successes overseas to fund investments in new businesses in India.

The most obvious impediments to further Internet diffusion are the government bureaucracy and lack of investment funds. The government is aggressively addressing the first issue and has signaled increased flexibility on the second, but it is too early to judge whether effective and consistent action will follow.

With respect to the basic telecommunications infrastructure, privatization began two years ago with local and value-added services, and is scheduled to continue until the entire sector has been privatized by 2004. It is apparent from the still-slow pace of development, however, that there are still many obstacles to be breached, and that the main benefits of privatization and competition will not be felt for several more years. Constancy of government policy, something for which the Indian government is not known, over what is likely to be a longer than planned-for period is necessary if the privatization program is to succeed. Foreign investors, especially, have yet to develop adequate confidence in the Indian market, although they have been spurred at least to enter the market by its size and potential profitability.

Beyond the most obvious issues, however, the emergence of the Internet as an important communications and business medium in India will most likely raise questions about various forms of security. Internal security is an important, although rarely explicitly discussed, issue for the Indian government, which is riding herd on hundreds of fractious ethnic groups, a sizable number of which have turned to violence at one time or another in the past decade to attain their goals, usually of increased autonomy and budget allocations. The detonation of nuclear devices by both India and Pakistan this Spring, and the attendant inflammatory rhetoric in New Delhi, Islamabad, and Beijing, is a timely reminder of the tenuous international security situation in the region. India and Pakistan are at war, albeit at a low level. Fighting in the Kashmir region has waxed and waned ever since the two countries gained their independence and there is no end in sight. India also has never officially acknowledged the PRC’s right to the territory it still occupies east of Karakoram (China’s “Aksai Chin” province) or in the Mishmi Hills of eastern Assam. If it is true that “[t]he most serious threats to the states of South Asia are internal conflict and the potential for state disintegration,”[140] the potential uses of the Internet by the government’s adversaries needs to be considered. Indian authorities today seem unconcerned about the potential for the Internet to be used to its disadvantage, most likely because they have insufficient experience with a medium that until now has had little presence or use in the country.

Since the Internet is one of the keys to generating more national wealth, the potential for it to be used by criminals to steal or redirect this wealth is already being considered. A number of the country’s major banks are considering allowing patrons to bank via the Internet and many of the country’s exporters rely heavily on computer networking, today NICNET and other proprietary systems, but soon on the Internet as well. The issues of “cyber crime” and “cyber laws” are currently being addressed, as is the necessity for any problems with the use of strong encryption.

Indian Security in the 21st Century

Aspects of Internet diffusion and use might enhance or reduce the Indian government’s prospects for achieving what its leaders believe is a stable security environment. Indian security doctrine is driven by three pre-independence themes: (1) Gandhian doctrine of non-violent struggle (custom-made for cyberwar?); (2) that Indian cultural unity can only be reflected by a secular state, Indian weakness is derived from British divide-and-rule doctrine which was successful due to inter-ethnic/tribal/religious distrust/rivalries (suboptimalization as a subcontinent-wide trait?); and (3) “myth of a golden past” that inspires a need to catch up, technologically, by independent means.[141] The latter two concerns have contributed greatly to the state of affairs described in the previous sections.

The hyper-bureaucratization of the Indian government is due in part to historical legacy (not just the British, but Indian empires stretching back more than two millennia showed a penchant for a large, ubiquitous, and sedentary civil service) and is partly a reaction to the need to maintain the appearance of a representative government. To say “appearance” is not to doubt that the Indian government is at least reasonably representative, but to acknowledge that appearances, in the day-to-day activities of civil servants, of laws and regulations, of the relationship between the Union and regional governments and between the Union government and the various ethnic and religious constituencies, are carefully maintained at virtually any cost. At least in the IT sector, there is some recognition of the role of bureaucracy in retarding development, and another attempt is being made to ease controls, licensing requirements, fees and taxes, and other artificial impediments to progress disguised as necessary government control measures. To the extent that the bureaucracy is in fact reduced, Internet development should be increased. It is uncertain, however, what effect the burgeoning of the Internet might have on the bureaucracy. Several prominent IT proponents have hailed the Internet as making it possible for the government to be more approachable, accessible, and accountable. These goals might not be lauded by all.

Since the earliest days of the modern republic, “self-sufficiency” has been the mantra of socialist governments, particularly under Prime Minister Nehru and his daughter Indira Gandhi, seeking the “commanding heights” of the economy.[142] Self-sufficiency still permeates official discussions, but in practical terms has been more of an on-again, off-again proposition. The ready supply of inexpensive labor at all skill levels has made self-sufficiency a tempting but unreachable goal.[143] Early efforts at “self-sufficiency” in computer hardware resulted in the creation of the ECI (Electronics Corporation of India), which failed miserably while stifling private enterprise and innovation. The result is the virtual lack of any computer hardware industry in India, save the assembly of PCs from imported parts. Protectionist tariffs kept the prices of PCs in India high relative to labor costs, resulting in a general “undercomputerization” that continues today.[144] “Self-sufficiency” was somewhat more effective in parts of the telecommunications equipment industry. At the high end, efforts by the Center for the Development of Telematics (C-DOT) resulted in two indigenously-designed and manufactured central office switches, one each for large and rural applications. These designs were subsequently licensed for manufacture by Indian private sector companies who marketed them to the government in competition with public sector manufacturers. The result has certainly been cost savings in the purchase prices of these switches, but there is no recognition that the delays caused by the wait for the development and manufacturing of these switches, when imported equipment could be had readily in large numbers, may have in fact placed greater costs on the Indian government, economy, and society. At the lower end of the equipment spectrum, Indian companies have become quite active at licensing foreign technology, often adapting that technology for the local market and conditions, especially the harsh environment in which much of it must operate. The proliferation of the Internet presents the possibility for technology transfer on a heretofore unimaginable scale. This is likely to spur the domestic economy, but may also present problems for a government seeking to maintain some degree of control over the IT sector as well as foreign governments seeking to enforce export controls.

The following sections address some of the major issues in international and internal security that might be affected by the diffusion of the Internet in India. The section closes with a review of reasons for optimism, emphasizing the activities of the recently-convened National Task Force on Information Technology and Software Development.

            International Security

The Indian government believes that the two most significant threats to the Republic’s security are the People’s Republic of China and Pakistan, in that order. As stated above, India has border disputes with both; the dispute with Pakistan over Kashmir has taken the form of low-level ground combat and occasional terrorist attacks for several years. India is also interested in the Sindhi-Mohajir question in Pakistan, since the Mohajirs are ethnic Indians of the Muslim faith who fled India when the former British colony was partitioned. There are about 120 million Muslims in India outside the Muslim-majority Kashmir region.[145] Their relationship with a Hindu-centric central government has been less than settled since well before independence, and this relationship has become more uncertain since the ascendancy to power of the Bharatiya Janata Party (BJP).

India has no quarrel with Bangladesh, the “Land of Bengals,” whose creation India helped force on Pakistan. The East Bengals and their Indian brothers in the state of West Bengal appear to have more in common with each other then the latter have with New Delhi.

While the Indian government, as the “leader” of the South Asian Association for Regional Cooperation (SAARC), has expressed interest and concern regarding Myanmar, the government has few security concerns with respect to that country. India’s principal concern on its “farthest frontier” is the security of the Andaman and Nicobar Islands, which lay across the Andaman Sea from Myanmar, north of the Strait of Malacca. The Defense Minister has expressed concern that the value of the strait’s traffic makes control of the strait, and secondarily India’s eastern islands, a point of potential contention.[146]

The 1962 defeat by the Chinese has been termed a “turning point in Indian military history.”[147] Since then, the defense budget has been yet another “sacred cow,” and the military began its self-sufficiency program, eventually establishing 33 ordnance factories, 39 major research and development establishments under the aegis of the Defense Research and Development Organization (DRDO), and nine public sector companies. In this case, there was an implicit recognition that self-sufficiently might increase costs and slow defense modernization, but the reduction of India’s perceived vulnerability of external political influence was deemed worth the extra burden.[148] The 1971 victory over Pakistan, which resulted in independence for Bangladesh, marked another watershed in Indian military thinking. Despite the euphoria over the military victory, the Indian government believed that its international image had been diminished overall due to the US government’s deployment of the USS Enterprise battle group to the Bay of Bengal in a show of support for Pakistan. India had proven its mettle regionally only to be overshadowed by a distant power. This show of American force also raised for India the specter of a possible US-China-Pakistan axis against India, a threat which still has credibility today.[149]

At present, there are few suggestions that any South Asian countries are contemplating the use of the Internet as a major threat or weapon. To the extent that it has considered the issue, the Indian government does not believe that there are any major threats from that quarter, although the India Navy has expressed concern regarding future developments. In the view of the Indian government, the Internet is principally an economic tool.

According to “Preparation for Information Warfare,” a paper released by the Indian Navy late last year, the prospect of computers being used to “cripple computer networks, … corrupt data, … [and] disable communication systems” is “frightening.” The Internet is viewed as the mechanism that makes such attacks feasible. The Navy recommended the establishment of an “Institute for Information Warfare” and the ear-marking of about Rs 500 crore (US$125 million) for defensive hardware procurement and the creation of intrusion-proof communications systems. The paper also recommended the development of computer virus countermeasures (CVCM) and the creation of a National Electronic Civil Defense establishment to “build defensive walls around civilian computer networks like banking or railways.”[150] However, the Navy paper fails to identify any parties that might engage in information warfare against India.

The Indian, on the other hand, has set the goal of making the entire force “fully computer-literate” in order to meet the challenges of a “futuristic cyberwar.” While the Indian government is apparently relying upon the military to increase computer skills in the civilian sector, the army, on the other hand, is looking towards cooperation with the private sector to increasing the level of computer literacy in the army. In the future, army personnel who are insufficiently skilled with computers will, among other things, be barred from overseas assignments, including potentially lucrative UN peacekeeping duty.[151]

The attack and possible penetration of the Bhabha Atomic Research Centre’s Web site in early June 1998[152] may have served to confirm some people’s worst fears, but it was hardly a national security threat. Despite claims by the hackers, who call themselves “Milw0rm,” it does not appear that any government network was breached nor any sensitive data stolen. BARC officials insist, and this was corroborated by other government officials, that the BARC Web-server is a stand-alone computer. Given the Indians’ penchant for secrecy, especially in the area of nuclear research (recalling that the Pokharan nuclear tests surprised most governments, including most officials of the Indian government), BARC’s assertion is credible. Independent reviews of the “stolen” material released by the hackers discovered no significant information. This was not the first hacker attack on Indian Internet sites, but none have been significant and none of the earlier attacks were publicized by the attackers. According to N. Vittal, former Secretary of the Department of Electronics and former Chairman of the Telecom Commission, hackers are “part of the IT scenery” and must be taken into consideration, but not taken too seriously.[153] Another senior IT sector official confirmed that hacking has occurred since the very earliest days of the Indian Internet, but that it has not generally been of much concern. A New Delhi consultant and IT professional indicated that, in the early days of ERNET, some local hackers were actually quite useful, since they knew more about the Internet than did the ERNET technicians and were not as shy as the civil servants were about working on weekends.[154]

The military establishment does not at present make extensive use of the Internet. The deployment of Internet access nodes does not appear to have been influenced by the presence of military headquarters or commands. Three of five Army headquarters are in cities currently served by the GIAS, but only two of five Air Force headquarters cities have Internet service and only one of three naval commands is in proximity to the Internet.

There are no direct connections between Ministry of Defense networks and the Internet, and no military unit or organization has a leased-line connection. Some army commands and the DRDO have a few Internet accounts, the use of which is restricted and monitored. The reason for the lack of connections appears to be a lack of understanding of what value the Internet might be to the military. The DRDO is in the process of setting up a Web site for coordination of the Joint Technical Program with agencies in the United States, but the server will not be connected to any DRDO internal networks. The restrictions on Internet use, especially at the DRDO, are principally due to fears about inadvertent security breaches or information leaks.[155]

The military will certainly make increased use of wide-area computer networking in the future, however, and this will likely include some form of connection to the Internet. Again, the Navy has been the most vocal service in this area, having announced that it will “endeavor to computerize and network all its units at sea, establishments and offices ashore, and headquarters for operational and support roles within the service and for inter-operability with the Army, Air Force, and other civil agencies by 2002.”[156] Starting as it is from a relatively low level of computerization, this ambitious project has the advantage of having inherited few, if any, security weaknesses from legacy systems and networks.

“Non-Military Pressures” In September 1996, the Indian Ministry of Defense published a policy paper that enumerated new categories of national security threats from foreign “non-military pressures.” Pressure or control by foreign nations in the areas of trade, intellectual property rights, the environment, human rights, and tech­nology transfer would henceforth be viewed as potential threats to India’s national security and be subject to “immediate defensive and offensive response.” This response could be military, entirely non-military, or a combination of the two, although one official suggested that a military response to a non-strategic threat would be inappropriate.[157]

While the Internet certainly was not at the core of this new policy, and in fact was probably not considered at all, the proliferation and increased use of the Internet in India has the potential to impose “non-military pressures” in several areas identified by the MoD policy paper. To the extent that the development of the Internet in India is expected to boost the economy, threats to the network and Internet commerce could be viewed as a national security threat. Possibly of more immediate concern is the Indian government’s sensitivities regarding human rights issues and the government’s international image. The activities of some non-governmental organizations (NGO), especially international NGOs, could emerge as a “national security threat” in the near future if these activities are enhanced by the use of the Internet in a way that either affects the Indian government’s international image or that can be interpreted as attempting to bring international pressure to bear on Indian domestic policy issues.

At present, there does not appear to be a large “threat” from NGOs on the Internet. Web sites created off-shore that are critical of the Indian government or its policies and aimed at an international audience relate principally to Kashmir. Some domestic separatist groups have also created off-shore Web sites (see below). No government agency or official has expressed any concern about these off-shore Web sites; there is barely any awareness of them within India or elsewhere. While the creators of these Web sites are prone to boasting that their message reaches the whole world, the truth of the matter is that their sites are available to the world, but not much of the world is seeking out their message. The Web still not does have the power or reach of television. The interactive nature of the Internet makes it a potentially more useful tool, but the propagandists have yet to determine how to use the Internet more effectively.

As of mid-August 1998, there were at least 18 Web sites on-line posted by 17 organizations or individuals addressing the conflict in Kashmir. All but four of these sites were hosted in the United States; two were hosted in the United Kingdom,[158] one was in Canada, and one was posted by the government of Pakistan. Six of the sites were overtly pro-India, ten were either pro-Pakistan or pro-independence (with a strong Mulsim bias), and two were neutral information resource sites (one of which was dedicated to preservation of the environment of Jammu & Kashmir). Five of these sites (one pro-India, three pro-Pakistan, and one neutral) were hosted by Geocities. The rhetoric on these sites varied from mildly exhortative to inflammatory, with most of the sites attempting to present a moderate appearance. The government of India is not participating in this virtual campaign via Web postings.

            Internal Security and the Internet

The greatest threats to Indian national security today are internal, rather than external.[159] Separatist and autonomist movements, based largely upon ancient race and class distinctions[160] and only secondarily on religious differences, have waxed and waned over the past decades, accompanied by varying degrees of violence and met with various proportions of force and appeasement.

India considers itself especially vulnerable to spill-over turmoil due to its central location in South Asia and the fact that major portions of its population shared religious, ethnic, or linguistic heritages with the populations of neighboring countries[161] (e.g., Sikhs with Pakistan, Tamils with Sri Lanka, Bengalis with Bangladesh). This has reinforced India’s resolve to be the regional leader, a resolve that has caused significant problems with both Pakistan and Sri Lanka.

According to Thomas, speaking of earlier problems, “[a] major cause for the breakdown of Indian democracy may be traced to the government’s inability to cope with unconventional modes of conflict.”[162] Both the low-level insurrections in the northeast and potential use of the Internet could qualify as “unconventional modes of conflict.” If the former were to employ the latter, the threat to Indian democracy could be magnified. Could the Internet emerge as a new, unconven­tional battleground? There are no indications that this is happening today, but the further diffusion of the Internet within India might make the medium more useful to insurgents by making it more accessible, increasing their potential domestic audience, and providing increased opportunities to mask their activities and whereabouts. For the moment, the potential for political dissidence or separatism to spread to the Internet is considered slight, if for no other reason than the Internet’s general unavailability to most Indians.[163]

On the other hand, freedom of expression is one of the outlets (along with the frequently-exercised electoral process) for the “frustration and despair” that are so much a part of the Indian landscape.[164] The Internet would certainly expand those outlets, on an international scale. It is this latter possibility that is the real concern of the government today. International embarrassment of and/or possible pressure on the Union government appear to be the principal fear of the government with respect to all media.

Today, the principal impediment to use of the Internet by separatist/autonomist groups is its lack of availability in the regions under attack. The Indian government’s ambitious plans for rolling out the Internet into every district will make the Internet available in at least every district center within the next several years. Given that these movements are “spearheaded by students and the educated unemployed,”[165] there is little doubt that these groups will have access to the skills needed to use the Internet. Whether and how they will do so is moot. Earlier improvements in communications and educational opportunities are believed to have increased the politicization of minority groups and the “untouchables,” resulting indirectly in the violence that started in the early 1970s.[166] The Internet is intended to generate vast improvements in both communication and education, inter alia, and thus may once again become a force for politicization.

Current Problems Areas that are closed to foreigners by Indian government, an indication of problems or military concerns, include Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim, Tripura, parts of the Kulu and Spiti Districts of Himachal Pradesh, the border areas of Jammu and Kashmir, parts of Uttar Pradesh and Rajasthan, the Andaman and Nicobar Islands, and the Laccadive Islands. The latter two island groups are principally military outposts.

The problems in the Northeast Region, including the first eight states named above, had their roots in insurrectionist movements in the 1950s, but only erupted into significant violence in the 1980s. The area is inhabited by tribal groups ethnically very different from the rest of India, and it is the most backward region of the country.[167] Several states, including Mizoram and Nagaland, are predominantly Christian. The National Socialist Council of Nagaland, which has split into two factions, has historically had its headquarters in Myanmar, complicating international relations, although the governments of Burma and Myanmar have both attempted to suppress Naga activity. The Mizo National Liberation Front and Tripura National Volunteers have been largely inactive for over a decade. In Manipur, the Chinese government was implicated in the activities of the People’s Liberation Army and the Revolutionary Army Kuneipak, but these have died out as well. Of these various groups, the Assamese and Nagas have independent Web presences, in addition to sites sponsored by the government of India, but the presence is minimal and the sites are not particularly inflammatory. Their intended audience is likely the international community, but their credibility may be questionable since they are all maintained outside of India by expatriates. The only active militant group in Assam, the Bodos, who seek an autonomous “Bodoland,” has no presence on the Internet.

Among the northeastern states, the most interesting Web site, unique in all of India, is that of the Nagaland Police ( Although the site is maintained on an India Express server in the United States, it is apparently an official site and contains surprisingly detailed information about Naga insurgent activities and police responses. This stands in stark contrast to the reaction of the Director General of the West Bengal Police, who, when questioned in mid-1998, stated that he did not know what the Internet was.[168]

One of the more violent groups that continues its war against the Union government is the Communist Party of India (Marxist-Leninist), commonly known as Naxalites because the movement arose in the Naxalbari region of West Bengal. Naxalites have been credited with causing 1,515 deaths nationwide over the past three years. This group has no identifiable Internet presence.

In the Punjab, Sikh separatists continue to agitate against the Indian government, although there has been no significant violence since the mid-1980s. There is a plethora of Sikh religious and political Web sites, including one posted by the “Government of Khalistan in Exile.”

Indian Intelligence Services The agency most immediately concerned with separatists and other militant groups is the Home Ministry, the parent of India’s domestic security service. The Home Ministry’s Intelligence Bureau, also known as the Central Bureau of Intelligence, is responsible for counter-espionage, political intelligence, and dealing with subversive activities. It coordinates its activities with the criminal investigation and intelligence branches of the state governments.[169] The Bureau is responsible for conducting authorized telephone wire taps, and is most likely the agency that monitors at least some aspects of Internet activity. While it is “common knowledge” in New Delhi that all Internet traffic is monitored, this is not likely to be the case, if for no other reason than a lack of resources. The amount and types of traffic being monitored, the means employed, and the reasons for and controls on such monitoring are not public knowledge. Indian government officials interviewed in the summer of 1998 declined to discuss or speculate on this topic.

The Research and Analysis Wing of the Prime Minister’s office is responsible for foreign intelligence collection and analysis. Its involvement with and view of the Internet are unknown.

Infrastructure Protection The Internet is not likely to become interconnected with critical infrastructure elements, such as electrical power generation and distribution or air traffic control, in India over the near term. Therefore, there is little likelihood of any threat to India’s physical infrastructure arising in the near term from the further diffusion of the Internet, the Indian Navy’s information warfare concerns noted earlier notwithstanding.

Near-term plans for non-telecommunications network operators, such as the electrical power utilities or Indian Railways, to offer ISPs the use of spare capacity on their networks could create vulnerabilities in these networks, depending upon how “outside” elements are connected to the operators’ communications circuits. It is most likely that, despite the physical connection, ISP and other “external” traffic will be isolated from the networks’ operations.

To the extent that the Indian government is relying, and intends to rely more heavily, on use of the Internet to further develop the Indian IT sector and attendant export earnings, protection of the domestic network and its subscribers and international links might become a priority issue for economic reasons. Of potential note in this regard is the interest expressed by some banks in Internet banking. ICICI Bank is already providing its clients with access to basic services via the Internet. There were about 2,000 customers registered for Internet access to their accounts as of mid-1998; about 40 percent of these were from overseas (NRIs), banking in India via the Internet from places as diverse as Kazakhstan, Mozambique, Namibia, and Viet Nam. Following ICICI Bank’s offering Internet access, NRI deposits more than doubled, to 10 percent of the banks total deposits.[170] A new private-sector bank, IndusInd Bank, is also on the Web via their “” service. In addition to basic banking services, provides access to loan and interest rate information and includes software to calculate long-term yields. IndusInd Bank plans on offering corporate services, such Letters of Credit, via the Internet.[171]

The Development Imperative Although the world’s two most populous countries, the People’s Republic of China (PRC) and India, share some obvious attributes—such as geographic size and proximity and huge, mostly rural populations—there are significant differences in national wealth and the standards of living of their respective populations. The degrees of poverty, under-development, and disparity between the top and bottom layers of society in the world’s largest democracy compare unfavorably with those in the world’s largest, and one of the few remaining, Communist states. While there are many reasons for these disparities, mostly unrelated to this study, the ways in which the two countries have approached high-technology infrastructure development are pertinent.

In India, not only is there a large gap between the richest and poorest in society, but that gap appears to be widening. Especially, the populous and largely Hindu states of the north are falling further behind the national average, at the same time that the wealthiest areas, such as Maharashtra and New Delhi, are pulling ahead. Table 34 summarizes the development statistics over the decade of the 1980s. Bihar, Madhya Pradesh, Rajasthan, and Uttar Pradesh, which comprise about 40 percent of the country’s population, have declined further relative to the rest of the country in the ensuing eight years. Aggressive development, especially in high technology industries, continues to favor the average areas, such as Andhra Pradesh, Karnataka, and Tamil Nadu.

Although the Internet is expected to enhance economic development in India, as Table 31 indicates, Internet development to date has been concentrated in the relatively wealthy business centers. There are those[172] who argue that this is the fastest way to spur development, concentrating scarce investment resources in the high-value markets. Over the longer term, however, the Indian government has committed to providing local access in every district.

Table 34. Comparative Development Indicators, 1991[173]


Population (M)

Growth 1981-91


Urban Share (%)





Andhra Pradesh






























Madhya Pradesh
























Tamil Nadu






Uttar Pradesh






West Bengal






All India






A Cautiously Optimistic Outlook

There are a number of reasons for optimism that the Internet in India will not only continue to grow, but will grow much more rapidly than it did over the first decade of its existence in India and spread across the entire country. The principal reasons for this optimism are the huge demand for service, recent limited deregulation steps, and the activities of the National Task Force on Information Technology and Software Development. The Task Force’s recommendations are, however, only recommendations today and their implementation is uncertain. Other current events, such as on-going rural development projects and government-industry joint ventures, give additional cause for optimism.

            Demand Drivers

The demand for Internet service in India is very high, greatly exceeding current and projected near-term service availability. Part of the reason for this high demand is the general awareness of the Internet on the part of the educated middle class and their desire for improved access to information and communications. The “India Internet World” conference and exhibition, held in New Delhi in late August 1998, might be taken as an example: Even as late as one hour before closing, almost 400 people (including 60 women, 20 children, and an orange-clad swami) were still waiting patiently in the entrance queue, while the small exhibition inside the hall was still packed with visitors.[175] The government is also a demand driver, in that many officials see the future of Indian economic development relying on the benefits of wide-area networking, especially in the educational, commercial, agricultural, and health sectors. The Chief Managing Director of VSNL, Amitabh Kumar, recently opined that the demand for Internet services in the smaller towns greatly exceeded the demand in the major metropolitan areas, where both current and planned near-term services are concentrated.[176] One of the major reasons for the demand for Internet access across the board is the desire, often critical need, for information. As is typical of developing countries, technical, scientific, and medical research information are hard to come by and expensive when available. A researcher at the Indian Institute of Technology in Chennai estimated that the typical Indian educational institution receives only a small fraction—less than 3 percent—of the professional journals routinely available in the West, and that many doctors “are happy with the free pamphlets that drug companies give them.”[177] The Internet is viewed as a means to rapidly and inexpensively acquire the latest professional information, as well as putting Indian practicioners in closer contact with their Western counterparts. Today, training programs are at once increasing the demand for Internet access and training the next generation of Internet user, while several high-technology projects sponsored by state governments are also bound to increase the demand for Internet connections.

Training A ubiquitous feature of the Indian landscape and featured prominently in the newspapers is advertising for computer training centers and courses. Earlier government efforts to boost IT, especially software exports, resulted in the creation of a vast computer training sector. Government certification ensures that the myriad of schools, from one-room store fronts in remote villages to large urban campuses, conform generally to a recognized curriculum. Competition for students is fierce.

The latest weapon in this competition is Internet access. The larger schools are buying Internet  accounts from VSNL in bulk and providing them to their students free of charge as an incentive. One of the pioneers of this trend, NIIT, also has the largest network of computer schools in the country. NIIT announced in March 1998 that students at centers in Ahmedabad, Bangalore, Calcutta, Chennai, Mumbai, and New Delhi would receive free Internet accounts.[178] NIIT requested a total of 20,000 GIAS accounts from VSNL to support this program. Coincident with the NIIT announcement, the Indira Gandhi National Open University opened negotiations with VSNL for 10,000-15,000 Internet accounts for its students.[179] Internet access has become a differentiator used by the higher-end schools and training programs to attract students. If prices come down in the near term, more schools are likely to lease bulk Internet access for their students.

Courses being offered via the Internet are another academic spur to Internet development. In January 1998, another major computer school system, Aptec, announced that its Master Software Engineering course would be offered in part over the Internet.[180] That same month, the University of Illinois at Urbana-Champaign began offering its Masters-level computer science program over the Internet in India in conjunction with a local partner, Quantum Enterprises,[181] and the BITS Pilani school in Rajasthan announced that it was launching a “virtual university.”[182]

High Technology Projects Public-private sector joint ventures have long been used in India by the government to spur development in targeted regions and sectors. One of the more successful examples of such a partnership is the West Bengal Electronics Industry Development Corporation Limited (Webel), headquartered in Calcutta and sponsored by the government of the state of West Bengal. Webel has created several wholly-owned companies in the communications, electrical power, entertainment, and electronic component equipment industries, as well as providing seed funds, usually as an equity investment, for regional start-ups. Although Webel concentrates on electronic hardware projects, it has invested in six joint-venture software companies, including the Indian subsidiary of SEMA Group Telecom, developers of telecommunications management systems.

The public-private joint venture model is being explicitly applied to software development in Hyderabad, the capital of Andhra Pradesh State. The Chief Minister (i.e., governor) of Andhra Pradesh, Chandrababu Naidu, is a strong proponent of information technology, and has set about both transforming the state government’s operations using IT and pushing development of IT-related industries. Naidu’s goal is to surpass Bangalore as a center for software development, and he has initiated pilot projects, such as the Hitec City and Indian Institute of Information Technology (IIIT), as focal points for future development.[183] Although these ventures are just in the start-up phase, they have been taken as models for emulation throughout India, in part because of Naidu’s high-profile participation in the National Task Force on Information Technology and Software Development. The explicit recommendations to replicate the IIIT throughout India, notably with only minimal funding, underscores the government’s intended reliance upon private sector financing. Naidu obtained significant support for the Hitec City and IIIT from Microsoft, Oracle, and IBM, all US-based multinationals. Whether sufficient additional donors and joint ventures partners can be found to propagate these types of projects throughout India is uncertain. It is also uncertain whether the other states, with their own problems, agendas, and projects, will be as active as Naidu’s Andhra Pradesh in pushing IT development.

Naidu has pressed ahead with both “appearance” projects, such as the recent inauguration of the Andhra Pradesh chapter of the Internet Society, and actual infrastructure developments to support his plans. The state government is planning on investing in a joint-venture, high-speed data communications backbone for the state, with links to Chennai and Bangalore. The project, which relies on coinvestment by the vendor, envisions the installation of more than 2,000 km of fiber optic cable in three networks that will be owned and operated by the state’s joint venture rather than the DoT. The tender is scheduled to be announced in September 1998, with contract award by the end of the year. (The short time scale for the contract award is in itself a feat.) During the two years that the government estimates will be required to complete the build-out, an interim virtual network will be established over existing DoT 2 Mbps links, which the Andhra Pradesh government has leased on a “non-commercial” (i.e., heavily discounted) basis.[184] The project is being financed by the Andhra Pradesh Industrial Infrastructure Corporation, which was cited in a 1998 Goldman Sachs study of India as a “breath taking” shift in government’s approach to infrastructure development and one of the prime reasons for optimism about investment in Andhra Pradesh.[185] The state government has also formed a joint venture with the DoE to launch a demonstration project for government access. The “Vijaywada Online Information Centre” (VOICE) is intended to make a wide variety of government information available state-wide via the Web and the state’s high-speed backbone intranet.[186]

For its part, the government of Karnataka is not standing still. Bangalore still holds the title of “India’s Silicon Valley,”[187] at least for now, and the state government recently commissioned the first phase of what has been billed as India’s first “information technology park.” The Interna­tional Tech Park, located in a suburb of Bangalore, is a joint venture between the Karnataka Industrial Areas Development Board, Tata Industries Ltd., and Singapore Information Technol­ogy Park Investment Ltd.[188] The park is intended to take the STPI concept one step further to establish a full-service IT center rather than concentrating on software development only.

The south appears to be where all the action is. In an effort to boost IT development, the Chief Minister of Tamil Nadu has set up a “State Task Force,” modeled on the National Task Force, to create a “single window clearance system” to ease the creation and operation of software and IT hardware companies in Chennai, the state capital. The intention is to compete with Karnataka and Andhra Pradesh and make Chennai an “IT hub.”[189] The government of Tamil Nadu also committed the state to achieving 100 percent literacy and computer literacy within 10 years, and towards those ends has launched the Internet Community Centres (ICC) Project. The ICC project is to be a joint venture between WorldTel, the international telecommunications development organization set up by the ITU and chaired by Sam Pitroda, himself a former chairman of the Indian Centre for the Development of Telematics (C-DoT), and an as-yet to be named local partner. The public-sector Electronic Corporation of Tamil Nadu (Elcot) is thought to be the leading candidate for participation in the US$50-60 million venture. The ICC project intends to set up as many as 1,000 Internet centers throughout Tamil Nadu, at a cost of about Rs 1.5 million (US$36,000) each. Mr. Pirtroda expects to be able to offer public Internet services at these centers for half of the fees charged by VSNL. The business plan is to be completed by the end of 1998, and the project implemented by the end of 1999. WorldTel is exploring the possibility of setting up similar centers in Kerala and the northern states of Uttar Pradesh and West Bengal.[190]

Although only the last of these projects explicitly addresses Internet development, to the extent that they all will depend upon long-distance, especially international, data communications and networking for their success, they represent added incentive for rapid Internet development. Additionally, these projects are comparatively well-funded, and should be able to make their own contributions to the further development of the Internet infrastructure in India.

            Impending competition

If government policy has been the major reason for the retarded development of the Internet in India, the recent reversal of some of the more restrictive government policies is the major reason for optimism regarding future development. Basic local telecommunications and some value-added services are already subject to limited competition, and the government has confirmed its decision to allow an unlimited number of ISPs to compete. With the licensing of private ISPs, new capital will be available for investment in Internet services, and the on-set of competition is likely to lower prices, especially in Mumbai and New Delhi, which are likely to have dozens of ISPs each. In January 1997, VSNL lowered its GIAS fees in anticipation of having to compete with lower-cost rivals. A side-benefit of this price reduction was a one-month 25 percent jump in the number of new subscribers.[191]

Of greater interest is the impending competition in international and domestic infrastructure. In June, the Communications Minister announced that ISPs would be allowed to establish their own international links to the Internet independent of VSNL.[192] The Indian government has assumed that these will be satellite links, but there is potential for some companies, such as Sprint RPG, to use a foreign partner’s existing capacity on a submarine fiber optic cable that connects to India. Although there have been no explicit announcements from the government, competition is also anticipated in the domestic long distance market for data communications. DoT is the monopoly long distance service provider, but organizations such as Indian Railways are planning on leasing spare capacity on their private telecommunications networks to competing basic services opera­tors and ISPs. The electrical power utilities are also eyeing the potentially lucrative telecommuni­cations infrastructure market. Both the railways and the power companies are public companies, but private companies may also be allowed to participate. A member of the Telecom Commission stated that ISP would be allowed to build their own infrastructures, and that basic telecommuni­cations services operators will also be allowed to build inter-circle links.[193] No time frame was given for this step, however.

At present, Indian Railways has only 1,500 km of fiber optic cable installed, compared with the DoT’s 72,000 km. They intend to replace or augment the existing copper cable network with fiber optic cable along all electrified routes by the end of 2002.[194] Although this represents only about 6,500 km of new cables, these cables will be in the high-traffic corridors, such as between Mumbai and New Delhi. One potential pit-fall is that at least the Southwestern Division is installing low-capacity fiber optic systems. According to the Division’s Chief Telecommunications Engineer,  the railway is “investing heavily in 32 Mbps [sic] links.”[195] The result may well be yet another network that is obsolete when completed.

PowerGrid Corporation of India Ltd. (PGCIL), another public sector company, has invited tender offers from international consultants to establish a hybrid fiber optic and microwave radio communications network along its rights of way nationwide. The company has yet to decide whether to lay and lease “dark fiber” or build and operate a complete communications network and lease capacity, but expects the project to cost about US$200 million and be financed by the World Bank. Work is scheduled to begin on the new interconnecting network by March 1999.[196]

In August 1998, VSNL announced that an international tender for a domestic fiber optic network would be issued in September, with the contract to be awarded by the end of 1998 and work completed by mid-1999. VSNL intends to have installed approximately 7,000 km of fiber optic cable and associated ATM equipment to provide a high-speed backbone between Bangalore, Cal­cutta, Chennai, Mumbai, New Delhi, and Pune. A network management center is to be built at VSNL’s Salt Lake center in Calcutta.[197] This not only will provide VSNL with a network com­patible with Project Oxygen and other international cable networks, as noted earlier, but gives the international carrier the ability to compete with DoT for domestic interconnections. In fact, in early September, VSNL announced that preparations for entering the domestic telecommunica­tions market had been completed. In addition to the network up-grades planned or in progress, VSNL signed MoUs with local agents in Chandigarh, Indore, Sachin, and Surat (Table 35) to market direct access to VSNL’s international circuits, by-passing the regional DoT networks. In Indore, VSNL set up a joint venture with the public sector Madhya Pradesh State Electronics Development Corporation Ltd. to build and operate a satellite earth station.

Table 35. VSNL Regional Alliances






Punjab Communications (Puncom)


Madhya Pradesh

Madhya Pradesh State Electronics Development Corporation



Diamond and Gem Development Corporation


The TRAI recently recommended that the telecommunications sector be completely freed from licensing requirements,[198] a suggestion that, if accepted, would take several years to implement but which could give a significant boost to investment in the sector, even in the early years.


Electronic commerce (“e-commerce”) is one of the most over-used buzzwords worldwide today, the use of the term vastly exceeding the amount of Internet commerce being realized. Many in India, however, feel that they are uniquely positioned to cash in on this trend, based on the large number of expatriates who could be counted on to buy Indian goods, and the relatively low investment required to take a small business “worldwide.”[199]

It is likely that e-commerce will be moderately successful in India, if for no other reason than the ability it will give NRIs to “buy Indian.” It is equally likely that Indian e-commerce will only be successful for international sales; there is little prospect for its wide use within India. There are several impediments that make electronic commerce potentially more difficult than elsewhere, beginning with the infrastructure limitations and lack of wide-spread computer use within India. Additionally, there are very few international credit-card holders in India and the idea of a domestic (i.e., Indian Rupee-based) credit card market is only now starting to catch on. Thus, even where there is an Internet connection and a computer user, there is likely to be no ready mechanism for paying on-line. Currently, Indian law specifies that monetary transactions must be recorded on paper. However, this impediment is likely to be removed or significantly modified in the near term expressly for the purpose of facilitating network-based transactions.

The first on-line shop located in India was opened this year by Rediff on the Net, which has put a catalog and order forms for books and music on its Web site and accepts credit card payment. The system, which is operationally similar to (including places for users to add their own comments and book reviews to the site), is based on an IBM Netfinity server and Net.commerce software.[200]

            IT Action Plan

Perhaps the most encouraging sign is the creation of the National Task Force on Information Technology and Software Development ( The National Agenda for Governance issued by the newly installed BJP in March 1998 said that “India can be a software superpower,” and that a national informatics policy leading to that goal would be announced. The Task Force was directed to produce an Action Plan within 30 days and a National Informatics Policy within 90 days. It was created on 22 May 1998 under the chairmanship of Jaswant Singh, Deputy Chairman of the Planning Commission and a Prime Minister’s Office insider. The two co-chairmen are Dr. M.G.K. Menon, a former Minister of State for Science and Technology, and the outspoken, IT-savvy Chief Minister of Andhra Pradesh, N. Chandrababu Naidu. The Member-Convener, essentially the executive director of the Task Force, is Dr. N. Seshagiri, Director General of the NIC and one of the country’s leading authorities on IT. The other 13 members of the Task Force are all well-known names in the Indian IT community, half of whom are civil servants, with the others being drawn from academia and the public sector. The make-up of the Task Force is heavily oriented toward the software sector, and this was reflected in the first two major documents issued by the group.

Less than three weeks after convening, the Task Force published a Background Report,[201] comments on which were solicited worldwide. The required Action Plan[202] followed, on 4 July 1998. The Prime Minister then appointed an inter-ministerial committee, comprising the Communications, Information, and Broadcasting Minister and the Ministers of Defense, Finance, Human Resources Development to examine the Action Plan and give their report within 10 days.[203] The committee endorsed the Plan, which was approved by the Cabinet and ordered into effect by the President on 25 July 1998.[204] The next steps, publication of a draft National Informatics Policy and an implementation plan for the 108 recommendations, are expected to be completed before the end of this year.

The Action Plan, included at Tab D, features 108 recommendations for removing bottlenecks to IT development to “facilitate India’s emergence as an Information Technology Superpower,” under three general objectives: an “Info-Infrastructure Drive” to build a world-class IT infrastructure, “Target ITEX-50” to increase software and IT services exports to $50 billion by 2008, and “IT for all by 2008” to make telecommunications, Internet, and IT-enhance public services available to all Indians by 2008. Highlights include recommendations that computers and the Internet be made available to all schools nationwide by 2003, that education centers to serve as models for IT-based education be established to help rectify the low levels of development in several of the poorer states, and that the armed forces be tasked with increasing IT penetration in “far-flung and remote areas,” notably those closed to foreigners. The 18 infrastructure recommendations include calls for open competition in backbone and access networks, local call rates for Internet access, and the establishment of public access and information centers.

The very short time frame allotted for development of the Action Plan was not generally considered a handicap. There is a core of senior IT professionals and IT-savvy politicians from which the Task Force could have been drawn, and any combination of those individuals would probably have come up with a similar list of recommendations. There is broad consensus regarding the causes of the current stagnation, and it is likely that most Task Force members, and those with whom they consulted, entered the process with a general idea of what needed to be done. The press release that announced the presentation of the Plan to the Prime Minister noted that a “significant feature of the ‘IT Action Plan’ is that most of its recommendations have already received prior concurrence of the ministries and department concerned.”[205] The Action Plan was thus more a compendium of accumulated problems and suggested solutions rather than a document that broke new ground. The new ground that was broken was the emphasis placed on IT by the new government that resulted in production of the Plan and may culminate in the Plan’s implementation.

The Task Force seemed to be inclined to operate in two “waves”: The first is to go after the “low-hanging fruit” with a series of specific recommendations that address generally-recognized problems with relatively simple fixes. The most obvious examples are the complicated systems of taxes, customs duties, import and export regulations, and licensing requirements. This provided a good opportunity also to issue several blanket recommendations to implement privatization throughout most of the telecommunications sector. The second “wave” comprises longer-term issues, addressed with “vision” statements and statements of intention rather than specific recommendations. Examples include the improvement of the educational systems in the poorer states through the establishment of IT-enhanced model schools that will (somehow) be emulated and directives to the military to enhance IT penetration in areas under its control.

The Internet is featured prominently in the Action Plan, with no fewer than nine of the recommendations, including the very first, specifically addressing Internet development issues. The first recommendation directs the DoT “and authorized ISPs” open Internet access nodes in all district headquarters by 26 January 2000, with toll calls to Internet access nodes to be charged at the local rate in the interim. As with many of the recommendations, it is not clear exactly who is to accomplish or pay for the proliferation of Internet access nodes to every district. More than 500 of the country’s districts do not have an Internet node today, and 91 of those districts have no computer network connection at all. The Action Plan clearly plans on the private sector making some of the investment, but does not make any allocations. Without further direction, it is likely that private ISPs would be concentrated in the more lucrative markets, leaving the public sector DoT to provide service in un- or marginally-profitable locations. India’s bureaucratic history suggests, however, that further government regulations can be expected that will require private investors to share in some way the burden of providing universal access.

Subsequent recommendations designed to spur the development of a robust Internet infrastructure and proliferation of services include a ten-year relief from any significant licensing costs (#7); the authorization of independent international gateways to the Internet (#8), which had already been announced by the Communications Minister a week earlier; the authorization of public sector companies and organizations that have geographic rights of way to develop and operate networks for public use (#9); the authorization for network operators to interconnect directly, rather than via VSNL (#10); permission for cable television operators to offer Internet access without having to get an additional license (#11); the authorization of fiber optic and radio links for “last mile” connections by ISPs (#12), inter alia, and the reservation of a radio frequency range for such links (#13); and the stipulation that computers and the Internet shall be made available in every “school, polytechnic, college, university, and public hospital” by 2003 (#59). This last recommendation is the only other one directly related to Internet development that has a significant cost attached; again, the issue of who is to pay is not addressed.

Other recommendations that mention the Internet as a component include #15, which authorizes the establishment of privately-owned Public TeleInfo Centres (PTIC) that are to offer ISDN and Internet access, videoconferencing, remote database access, and access to government information sources. The recommendation states that the DoT and unspecified other service providers are to make efforts to up-grade Public Call Offices (PCO) to PTICs, but does not specify the level of effort. It appears clear from the Action Plan and discussions with Task Force members that this recommendation is to be implemented principally with private sector funds and action.[206] There are an estimated 600,000 PCO kiosks in India today, of which about one-third are in rural areas. A conservative estimate of the cost of providing a kiosk with a terminal the higher-quality telephone connection needed for Internet access (without yet counting in the cost of proliferating ISDN connectivity), is Rs 15,000 (about US$3,500).[207] Thus, converting every kiosk in the country would require an investment of more than US$2 billion. More likely is that some owners of multiple kiosks will arrange discounted bulk equipment purchases, resulting in the conversion of some PCOs, probably fewer than half, to support Internet access. A Canadian manufacturer of pay telephones, King Products, is trying to sell King’s Internet-ready pay phones in India, principally to MTNL due to the high number of likely customers in MTNL’s market area and the reasonable availability of digital and ISDN telephone lines.[208] There are as yet no indications that either MTNL or a private company is prepared to make the required investment.

As recently as early 1996, only 216,000 of India’s estimated 600,000 rural villages had any telephones.[209] Although the DoT claims to have placed priority on rural expansion of the telephone network, only about half of the country’s villages are wired today. Recommendation 79 calls for the government to boost the use of IT in agriculture and “integrated rural development.” An initial project was started by the Prime Minister’s office to bring modern telecommunications services to a rural district of Maharashtra. The “Warananagar Wired Villages” project was subsequently transferred to the aegis of the National Task Force, and its completion date moved up to late Summer 1998, in order to serve as a demonstration project for further wired villages.[210] Significantly, these projects are to be undertaken as the State level, rather than by the Union government. Again, no source of funding was identified.

In Pondicherry, the M.S. Swaminathan Research Foundation ( isn’t waiting for government funding or the Action Plan to produce results. Their “Information Village Research Program” started with a very basic survey of the state of telecommunications in the Territory’s mostly rural villages, based upon which the Foundation has made plans to establish “Information Shops” in six villages. These shops will collect, process, and make available for local redistribution pertinent agricultural data, as well as information supplied by the central government. Rather than attempt to provide communications to every thatched hut, the project seeks instead to concentrate resources in regional centers that can thus offer more extensive services. The start-up is being funded by the Foundation and Canada’s International Development Research Centre, but they expect to turn the shops and infrastructure over to the DoT once the concept has been proven.

In addition to reliance on the Internet as a public information source, the Task Force also views it as an important advertising medium that will help ensure the success of the software development drive. Recommendation 48 calls for marketing “shrink-wrapped” software, for which India is not known, via the Internet, while #53 directs that “Mega Web sites” be created on the Internet to promote Indian software products.

Although there is still a large, unserved English-speaking market for Internet services, for it to spread beyond the urban core, local language content will be required.[211] One recommendation that may serve to make the Internet more widely useful in India over the long term is number 78, which calls for intensive development of applications in local Indian languages. As with many other important recommendations, this one appears to be left in the hand of the private sector, although there is a pilot program sponsored by the DoE. Earlier this year, the DoE announced that two Indian-language word processing programs were available, free of charge, on the Internet at the Web sited of the Center for Development of Advanced Computing (C-DAC) in Pune. Hypertext mark-up languages (HTML), Internet browsers, and e-mail programs have been targeted by the DoE for early indigenization.[212] Thus far, the focus of the development of local-language software has been Hindi and the Devanagari script, on which many Indian languages are based.

The history of telecommunications and computing development in India is one of repeated attempts to develop a domestic hardware industry. The telecommunications ventures have achieved more success than those in the computing sector, but the costs have included an increased time delay between the emergence of new technical developments and their availability in India. While the actual cost of equipment produced under these schemes is in fact a fraction of comparable foreign equipment, the real total cost to the Indian economy and standard of living are incalculable. The Task Force proposes to continue the emphasis on domestic industry with recommendation 80, which directs the government to “take necessary steps” to develop and use “indigenous technologies.” This is intended to increase the pace and lower the cost of providing telephone services and Internet access in rural and remote areas.

The Task Force’s recommendations have profound economic implications not only in their scope and goals, but in specific recommendations that will change the nature of business and financial transactions in India. Today, there are relatively few international credit card users in India, due principally to the unconvertable nature of the rupee and the attendant requirement to settle bills off-shore. Recommendation 42, inter alia, notes that the use of credit cards is required for Internet commerce and directs that the use of international credit cards be permitted for software and IT services purchased over the Internet “or Extranet,” as well as for paying for domain names (presumably in the global TLDs, such as .com, that are managed by off-shore registrars).

Several of the recommendations postulate an increased role for the defense community in the provision of IT services and connectivity. Of potential security concern is recommendation 17, which directs that the military “enhance PC and Internet penetration in remote and far flung areas” by connecting these areas to the military’s communication backbone. Thus far, the Ministry of Defense has maintained its nationwide communications network entirely separate from civilian systems, with only minimum interconnectivity such as telephone gateway exchanges. To the extent that the military uses the Internet, a limited extent indeed, it accesses the public network directly; there are no links to the military network.[213] The military is also directed, in recommendation 69, to open its IT-related institutions, specifically the Centres of Excellence in IT Software and System Engineering, to the public so that they may be used “to the national advantage.” The government is also to create new Information Technology, System Engineering, and IT Security Institutes using Armed Forces personnel. Ex-servicemen and retirees with IT-skills are to be used to enhance the penetration of IT in rural areas (#71). Recommendation 83 repeats the directive for the Armed Forces to integrate the far flung and remote areas with “mainstream India.” The areas are specified as Ladakh, the Northeast Region, Andaman and Nicobar Islands, Kutch, Lakshadweep and Minicoy Islands, and the border areas of Himachal and Rajasthan. These are all exclusion areas under military control either due to their strategic nature (e.g., the island groups), local unrest due to autonomist or secessionist movements, or border disputes with China and Pakistan.

Table 36 compares the recommendations with the various determinants that they are intended or expected to affect. With the notable exception of security, which is given only general mention in the Action Plan, every element that was deemed important in determining the nature and extent of Internet development in India, and IT progress more generally, is addressed. When compared with the biggest obstacles to India’s development, discussed in the Determinants section (above), it is notable that the most recommendations have been made in the areas of government bureaucracy, taxation and fees, and human resources development.

Action Plan Shortcomings As ambitious as the Action Plan is, there are several points that were inadequately addressed. The most obvious is the whole issue of funding, but this was beyond the Task Force’s terms of reference and will likely take some time to sort out. There is clearly a hope that the private sector will assume a major portion of the burden, hence the emphasis on privatization and deregulation.

The preamble to the Action Plan states in part that among the aspects of life that are being changed by IT are “national defense and global security.” However, these issues are not subsequently addressed in the Plan. As noted above, the military services are called upon to assist other sectors in their IT development, but the plan does not include any specific suggestions as to how IT is changing the national defense environment or how IT might be used to enhance India’s national security. Such a discussion would seem especially appropriate at a time when Indian and Pakistan both recently tested nuclear devices and India announced its intention to weaponize its nuclear capability. Global security is given similarly short shrift.

While the preamble to the Action Plan notes that IT is changing “every aspect of human life,” medicine and health are not among the ten aspects listed, although entertainment is. Training people with respect to tele-medicine applications is mentioned in the overview of the “IT for all by 2008” section, but any application of IT in general or the Internet in particular to the health sector is completely missing from the plan. This is potentially a huge oversight, both in terms of the potential benefits and the potential costs, should development of IT services for the health sector be tacked on later.

The Action Plan has already been criticized by the IT hardware industries for its concentration on software. The fear has been expressed that India will turn into a “software superpower” only, becoming increasingly dependent upon foreign hardware.[214] Such dependence could have profound effects upon an Indian economy that required extensive hardware imports to maintain its software industry. This concern has been ameliorated to some extent by the creation of a Panel on Development, Manufacture, and Export of IT Hardware subordinate to the Chairman of the National Task Force. The Panel comprises significant industry representation along with government and academic representatives, and is working with the Confederation of Indian Industry Information Technology Council, not coincidentally chaired by Chandrababu Naidu, one

Table 36. Relationship of Recommendations to Determinants[215]


Relevant Recommendations

Government policies

1, 49



State monopolization of the telecommunications sector*

8, 9, 10, 15

Licensing policies and other barriers to competition*

7, 11, 15, 16

Taxation, fees

2 ,3 ,19, 20, 21, 22, 24, 25, 27, 28, 29, 30, 31, 32, 33, 44, 45

Foreign investment restrictions/incentives




Content and dissemination controls




Government accessibility

84, 85 ,86, 92

Responsiveness to cultural concerns


Responsiveness to constituent demands




Legal framework

69, 93, 100, 102, 103, 107

Encryption policy


Surveillance, monitoring, interception

13, 101

Dissidents, NGOs, separatist movements


Infrastructure protection


Social Equity


Equal access to IT resources

79, 95

Human resources and education investment

58, 59, 60, 61, 62, 63, 64, 65, 66, 67, 68, 69, 70, 71, 72, 73, 94, 99



Ponderous decision-making and implementation

4, 14, 23, 26, 43, 47, 48, 89, 105, 106, 108

Collaboration vs. competition between bureaucracies


IT planning and policy

87, 90, 97, 98

Regulatory regime

5, 40, 50, 55, 81, 82

Active government support of the private sector

51, 53, 54, 56, 57, 76, 77, 91

Factor conditions






Caste system




Obstacles to infrastructure development


Human Resources






Financial Resources


Investment priorities

18, 34, 35, 36, 37, 38, 46, 88

Technological Resources


Level of IT development/sophistication*




Domestic telecommuncations*

6, 9, 12, 13, 15, 17, 80, 83

International telecommunications


of the co-chairmen of the National Task Force.[216] Coincident with the establishment of the Panel, on 8 August 1998, the National Task Force issued its second “background report,” this one consisting of recommendations for development of the IT hardware sector.[217] Unlike the Action Plan, this report does not have the force of law, and early reports suggest that at least some of the financial recommendations, such as government subsidies, have already been rejected.[218] The Labor Ministry and Centre for Trade Unions have also registered their objections to the recommendation that IT labor be exempted from the Contract Labour Abolition Act, which would have allowed IT sector companies more freedom in identifying employees as “temporary” and greater flexibility in shift scheduling.[219]

 “Appropriate” use of the Internet is a prominent topic of discussion in virtually every country, but is largely absent from the Indian scene. It is entirely absent from the Action Plan. The issue is rarely, if ever, raised in the media, and most officials brush off questions with unconcern. Internet regulation is viewed at this time as inimical to the rapid growth needed for economic reasons.[220] Officials do not want to get into cultural issues, which can be particularly fractious in such a multi-cultural country as India. Current laws forbid such things as the dissemination of pornography and publication of liquor advertising (in some states and across state lines), and these are held to be sufficient to deter anti-social behavior at least for the near term. Where pornography may be of particular concern, with respect to young people, VSNL has purposely limited student accounts to shell access in part to prevent them from being able to download any images at all, much less pornographic ones.[221] Other issues, such as use of the Internet by dissidents or others for subversive purposes, are not discussed at all. Presumably, these are the realm of the Home Ministry and off-limits to others.

Recommendation number 1, otherwise so promising for future Internet development, continues the current ban on Internet telephony, placing the responsibility for abuse prevention on ISPs. Although international telecommunications is a big revenue-generator for VSNL, and hence the national budget, such artificial stifling of service is both contrary to the generally liberal view taken elsewhere in the Action Plan and the best interests of future economic development. The cost of international telecommunications today is a major burden on both businesses and individuals which could be substantially alleviated by opening the Internet in India to telephone service, in which VSNL could compete, too.

The use of encryption is inadequately addressed. The legality of using encryption on data networks in India today is ambiguous. The policy must be made clear if the Internet is to be used for electronic commerce. Recommendation 104 calls for the defense establishment to transfer its cryptographic expertise to civilian information security agencies, but gives no clues as to how any such civilian agency might function, who would be allowed to use their products, and what controls the government might maintain over the use of cryptography by the private sector.

Finally, there is the question of implementation. The Action Plan is very ambitious, not only in its scope and depth, but also in the number of entrenched bureaucracies whose fiefdoms it breaches. Enabling legislation is likely to be forthcoming to support the economic and regulatory aspects of the Action Plan, but the prospects of energizing the cumbersome Indian bureaucracy are uncertain. Although the Plan has been criticized for, among other things, putting “computers in schools that don’t even have blackboards,” its basic goals can be realized, albeit more likely through local initiatives and despite the Union government, rather than with any extensive government support or cooperation.[222]

Tab A  India Glossary

ANSI               American National Standards Institute

BJP                  Bharatiya Janata Party—Currently, the ruling party in India. Considered to be of Hindu nationalist orientation.

BSC                 Binary Synchronous Communications

CAGR             Compound Annual Growth Rate

CCPA              Cabinet Committee on Political Affairs

C-DAC            Centre for the Development of Advanced Computing (Pune)

C-DoT             Centre for the Development of Telematics

CMC               Computer Maintenance Corporation—A public company that took over the assets of IBM India when that company was nationalized by Indira Gandhi. CMC was formerly the monopoly provider of hardware maintenance services and the only licensed computer manufacturer in India. <>

CVCM            Computer Virus Countermeasures

DICNIC          District Information System

DoE                 Department of Electronics

DoT                 Department of Telecommunications—A government organization, part of the Ministry of Communications, that operates the local and domestic long-distance (STD) networks, except in New Delhi and Mumbai. In accordance with the requirements for WTO membership, the DOT is being corporatized in preparation for full privatization. Additionally, licenses have been granted to private local and mobile telephone service operators throughout out India who will operate in competition with the DOT.

DRDO             Defence Research and Development Organization—The research and development arm of the Ministry of Defense.

ECI                  Electronics Corporation of India Ltd.—A public-sector company formed under the auspices of Indira Gandhi for the purpose of developing an indigenous electronics hardware industry. The company failed.

ECNET            Election Commission Network—A virtual private network within NICNET run by the Election Commission for tallying votes nationwide.

EDI                  Electronic Data Interchange

EDIFACT        EDI for Administration, Commerce, and Transport

EIS                  Executive Information System

Elcot                Electronic Corporation of Tamil Nadu

ERNET            Educational and Research Network

GB                   Giga-Bytes—1,048,576 bytes (8.4 million bits) of data.

GEDIS             Gateway Electronic Data Interchange Service—VSNL’s nationwide EDI network.

GEMS             Gateway Electronic Mail Service—VSNL’s international X.400 e-mail service.

GFCF              Gross Fixed Capital Formation—A measure of a country’s capital investment.

GIAS               Gateway Internet Access Service—VSNL’s Internet service, which offers leased-line and dial-up connections to the Internet. <>

GISNIC           Geographic Information System of NIC

GPSS               Gateway Packet Switched Service—VSNL’s international X.25 (X.75) service.

HCL                Hindustan Cables Ltd.—A public-sector manufacturer of telecommunications and electrical cables.

HNS                Hughes Network Systems

HVNET           High-speed VSAT Network

HTL                 Hindustan Teleprinters Ltd.—A public-sector manufacturer of mechanical and electromechanical printers.

ICC                 Internet Community Centre—A joint-venture project between WorldTel and the government of Tamil Nadu.

ICQ                 “I Seek You”—A communications network established by an Israeli company, Mirabilis. The most popular application is “chat,” with network-wide notification as users log on/off. <>

IDG                 Inter-Disciplinary Group

IDRBT             Institute for Development and Research of Banking Technology

IIIT                  Indian Institute for Information Technology

IIM                  Indian Institute of Management

IISc                  Indian Institute of Science

IIT                   Indian Institute of Technology

INDONET       A proprietary nationwide network operated by CMC.

I-NET              India Network—A nationwide X.25 network operated by VSNL.

IRC                  Internet Relay Chat

ITI                   Indian Telephone Industries Ltd.—A public sector manufacturer of switching and transmission equipment and subscriber terminals.

MCD-NET      Manipal Control Data Network

MIS                 Management Information System

MSSRF           M.S. Swaminathan Research Foundation—A sustainable development research center based in Chennai. The Foundation’s projects include coastal systems research, biodiversity and biotechnology, and ecotechnology and sustainable agriculture. The founder, Dr. M.S. Swaminathan, is UNESCO Professor of Ecotechnology at the Centre for Research on Sustainable Agriculture and Rural Development.

MTNL             Mahanagar Telephone Nigam Ltd. (“Great City Telephone Company”)—The monopoly local telecommunications service provider for the metropolitan regions of New Delhi and Mumbai (Bombay). <>

MW                 Mega-Watt

NASSCOM     National Association of Software and Service Companies

NCR-IP           National Capital Region IP Network—A high-speed intranet connecting STPI member units in and around Guragaon, New Delhi, and NOIDA to STPI headquarters via an Ethernet LAN and radio links.

NCST              National Centre for Software Technology <>

NIC                 National Informatics Centre <>

NICNET          National Informatics Centre Network <>

NRI                 Non-Resident Indian—An expatriate Indian citizen

ODLC             Optimized Data Link Control—A Hughes Network Systems proprietary protocol used in its VSAT networks

PCGIL             Powergrid Corporation of India Ltd.—The public sector company that manages the national electrical power grid.

PDH                Plesiochronous Digital Hierarchy—Similar to SDH, but using more than one primary frequency reference (clock).

PMO               Prime Minister’s Office

PSE                 Packet Switching Exchange

RABMN          Remote Area Business Message Network

Re                    Rupee

Rs                    Rupees

SDH                Synchronous Digital Hierarchy—ITU-T optical interface standard for 51.84 Mbps to 13.22 Gbps digital transmission over optical fiber. Functionally equivalent to the U.S. SONET standard.

SDLC              Synchronous Data Link Control—An IBM bit-oriented data communications protocol used in the Systems Network Architecture (SNA).

SITA                Société International de Télécommunications Aéronautique

SNA                Systems Network Architecture—An IBM proprietary network architecture using IBM’s Synchronous Data Link Control (SDLC) protocol.

STP                 Software Technology Park

STPB               Software Technology Park Bangalore <>

STPI                Software Technology Parks of India <>

STPN              Software Technology Park NOIDA (New Delhi) <>

TCIL                Telecommunications Consultants of India Ltd.—A public sector company specializing in the installation and maintenance of  telecommunications cables and equipment.

TRAI               Telecommunications Regulatory Authority of India—The regulatory body established in 1997 to oversee the activities of the the public and private sector telecommunications services operators. Implements policies set by the Ministry of Communications.

UN                  United Nations

UNTDI            UN Trade Data Interchange

VOICE            Vijaywada Online Information Centre—A demonstration project in Andhra Pradesh state to make government information available state-wide via the Internet and a local network.

VSNL              Videsh Sanchar Nigam Ltd. (“Overseas Communication Company”)—The government-owned monopoly provider of international telecommunications services. In accordance with the conditions for India’s admission into the WTO, VSNL’s monopoly over basic services will expire in 2004. <>

VSSL               VSNL Seamless Services Ltd.—A VSNL subsidiary set up in June 1998 to operate GIAS, GEMS, GEDIS, and video conferencing services.

Webel              West Bengal Electronics Industry Development Corporation Limited—A public sector company based in Calcutta that has created several subordinate electronics components manufacturing companies and made equity investments in private-sector start-ups in the hardware and software industries.

WTO               World Trade Organization

Tab B   Directory of Key Indian IT-related Organizations

Andhra Pradesh Government

Randeep Sudan, Additional Secretary to Chief Minister

R. No. 604

‘C’ Block, Secretariat

Hyderabad 500 022

Andhra Pradesh

Telephone    +91 40/235 940, 236 055

Facsimile      +91 40/231 805, 234 828


Andhra Pradesh Industrial Infrastructure Corporation Ltd.

H. S. David, Deputy Manager (Public Relations)

Parisrama Bhavanam

6th Floor, 5-9-58/B

Fateh Maidan Road

Hyderabad 500 004

Andhra Pradesh

Telephone    +91 40/237 622

Facsimile      +91 40/240 205

CMC Limited (Computer Maintenance Corporation)

A-5, Ring Road

South Extension, Part I

New Delhi 100 049

Telephone    +91 11/462 3111-5

Facsimile      +91 11/464 3913

DBS Internet Services Pvt. Ltd.

Raheja Chambers, 213

Nariman Point, Mumbai 400 021


Telephone    +91 22/287 2642

Facsimile      +91 22/287 2640


Department of Electronics (DoE)

Ravinda Gupta, Secretary

Electronics Niketan

CGO Comples, Lodhi Road

New Delhi 110 003

Telephone    +91 11/436 4757

Facsimile      +91 11/436 3134

Department of Telecommunications (DoT)

Sanchar Bhawan

20, Ashoka Road

New Delhi 110 001

Telephone    +91 11/371 4644

Facsimile      +91 11/375 5172


Gulshan Rai, Executive Director

Electronics Niketan, Room 4063

6, CGO Complex Lodhi Road

New Delhi 110 003

Telephone    +91 11/436 1251

Facsimile      +91 11/436 2924


Global Telecom Services Ltd.

C-47, South Extension II

New Delhi 110 049

Telephone    +91 11/625 8110

Facsimile      +91 11/625 1367

IBM School of Enterprise Wide Computing

Dr. R. Govindarajulu, Principal – Education & Training

IBM Global Services India Pvt. Ltd.

Block ‘A’

IIT Campus, Opp. CMC Ltd.

Gachi Bowli, Hyderabad 500 019

Andhra Pradesh

Telephone    +91 40/300 1356

Facsimile      +91 40/300 1366

Indian Institute of Technology, Madras

S. V. Raghavan, Professor & Head, Department of Computer Science & Engineering

IIT Madras      

D-30/7, Adyar Avenue

Chennai 600 036

Tamil Nadu

Telephone    +91 44/235 0563

Facsimile      +91 44/235 0509

Larsen & Toubro Limited, ECC Construction Group

D. Gnanasekar, Project Manager

Hitec City Project

P.O. Madhapur, Jubilee Hills

Hyderabad 500 033

Andhra Pradesh

Telephone    +91 40/213 437

Facsimile      +91 40/213 435

Mahanagar Telephone Nigam Ltd. (MTNL)

Jeevan Bharti, Tower-I

12th Floor, 124

Connaught Circus

New Delhi 110 001

Telephone    +91 11/373 2212

Facsimile      +91 11/331 7344


Mahindra Network Services Ltd.

38, Todar-Mal Road, 2nd Floor

Near Bengali Market

New Delhi 110 001

Telephone    +91 11/373 7840, 373 7839

Facsimile      +91 11/373 6534

Manipal Control Data Electronic Commerce Ltd.

55, First Floor, Sidharth Extension

Kalu Sarai

New Delhi 110 016

Telephone    +91 11/686 5961-3

Facsimile      +91 11/686 5964

Millenium Information Systems (Infosystems) Pvt. Ltd.

Atanu Kar, Managing Director

86, Ballygunge Place, Ground Floor

Calcutta 700 019

West Bengal

Telephone    +91 33/440 2194

Facsimile      +91 33/440 2331


Ministry of Communications

Sushma Swaraj, Minister

Sanchar Bhawan

20, Ashoka Road

New Delhi 110 001

Telephone    +91 11/371 9898

Facsimile      +91 11/371 1514

M. S. Swaminathan Research Foundation (MSSRF)

Prof. M. S. Swaminathan, Director General

V. Balaji , Regional Coordinator, Asian Ecotechnology Network

3rd Cross Street

Taramani Institutional Area

Chennai 600 113

Tamil Nadu

Telephone    +91 44/235 1698

Facsimile      +91 44/235 1319


National Informatics Centre (NIC)

Dr. N. Seshagiri, Director General

Dr. N. Vijayaditya, Deputy Director General

A-Block, CGO Complex

Lodhi Road

New Delhi 110 003

Telephone    +91 11/436 0788

Facsimile      +91 11/436 2489


National Centre for Software Technology (NCST)

Dr. S. Ramani, Director

Gulmohar Cross Road No. 9


Mumbai 400 049


Telephone    +91 22/620 0590, 620 1606, 620 1574

Facsimile      +91 22/621 0139


National Task Force on Information Technology and Software Development

c/o National Informatics Centre

Facsimile      +91 11/436 4873



Jaswant Singh, Deputy Chairman, Planning Commission


N. Chandrababu Naidu, Chief Minister of Andhra Pradesh

Dr. M.G.K. Menon, Former Union Minister of State, Science & Technology


Dr. N. Seshagiri, Director General, National Informatics Centre


Anil Bakht, IT professional

T.H. Chowdary, Former CMD of VSNL and Informtion Technology Adviser to the Chief Minister of Andhra Pradesh  

A.V. Gokak, former Chairman, Telecom Commission (through August 1998)

R. Gupta, Secretary, Department of Electronics

Dr. P.V. Indiresan, Former Director, IIT, Madras

Sudheendra Kulkarni, Director (Communications and Research), Prime Minister’s Office

P.G. Mankad, Secretary, Ministry of Information and Broadcasting

Dewang Mehta, Executive Director, National Association of Software Companies

N.R. Narayana Murthy, Chairman & Managing Director, Infosys

Ravi Parthasarathy, Managing Director, Infrastructure Leasing & FinanceServices

Rajendra Pawar, Vice Chairman and Managing Director, NIIT

Dr. Y.S. Rajan, Senior Adviser (Technology), CII

Ashok Soota, President, WIPRO Computers

N. Vittal, Chairman, Public Enterprises Selection Board, Former Secretary, Department of Electronics and Chairman, Telecom Commission

Co-opted Members

Dr. M.S. Ahluwalia, Secretary (Finance),Ministry of Finance

Commodore Prem Chand, Additional Director General, WESEE, Navy

Lt.Gen. S.S. Mehta, Deputy Chief of Army Staff

P.P. Prabhu, Secretary (Commerce), Ministry of Commerce

N.K. Singh,  Secretary (Revenue), Ministry of Finance

Planning Commission

Professor Madhu Dandavate, Deputy Chairman

Yojana Bhawan

Parliament Street

New Delhi 110 001

Telephone    +91 11/371 5481

Satyam Infoway (P) Ltd.

35, Velachery Road, Little Mount

Chennai 600 015

Tamil Nadu

Telephone    +91 44/235 4770

Facsimile      +91 44/235 4771


Shaw Wallace & Company Limited

Ashish K. Banerjee, General Manager-HRM

4, Bankshall Street

Calcutta 700 001

West Bengal

Telephone    +91 33/248 5601, 2489151

Facsimile      +91 33/248 6908

Software Technology Parks of India (STPI)

P.S. Narotra, Director

Block IV, 2nd Floor

Ganga Shopping Complex

Sector 29

NOIDA 201 303

Uttar Pradesh

Telephone    +91 91/542 538

Facsimile      +91 91/536 616


Telecom Commission

Anil Kumar, Chairman (appointed 27 August 1998)

P. Khan, Member

N.K. Sinha, Member

P.S. Saran, Member (Services)

G.C. Lyer, Member

Sanchar Bhawan

20, Ashoka Road

New Delhi 110 011

Telephone    +91 11/371 4644

Facsimile      +91 11/375 5172

Telecom Engineering Centre

Dilip Sahay, Senior Deputy Director General

Khurshid Lal Bhawan

Eastern Court, Janpath

New Delhi 110 011

Telephone    +91 11/332 0252

Telecommunications Regulatory Authority of India (TRAI)

Justice S.S. Sodhi, Chairman

Dr. B.K. Zutshi, Vice-Chairman

N. Ramachandran, Member

16th Floor, Jawahar Vyapar Bhawan

1, Tolstoy Marg

New Delhi 110 001

Telephone    +91 11/373 7272

Facsimile      +91 11/373 8708


Videsh Sanchar Nigam Ltd. (VSNL)

Videsh Sanchar Bhawan

M.G. Road, Fort

Mumbai 400 001


Telephone    +91 22/262 4020

Facsimile      +91 22/262 4027


Manipal Centre, N-602

North Block, 6th Floor

Dickenson Road

Bangalore 560 042


Telephone        +91 80/558 7533

Facsimile          +91 80/5587420

M. F. Ansari, Chief General Manager (Eastern Region)

18, Rabindra Sarani

Podder Court, 1st Floor

Calcutta 700 001

West Bengal

Telephone        +91 33/225 3266

Facsimile          +91 33/225 3218

L. Satyanarayana, General Manager (O)

Videsh Sanchar Bhawan

5, Swami Sivananda Salai

Chennai 600 002

Tamil Nadu

Telephone        +91 44/561 994

Facsimile          +91 44/583 838

Videsh Sanchar Bhawan

Bangla Sahib Marg

New Delhi 110 001

Telephone    +91 11/374 7310

Facsimile      +91 11/336 4821

Development Centre

Alandi Road, Dighi

Pune 411 015


Telephone    +91 212/887 744

Facsimile      +91 212/887 470

West Bengal Electronics Industry Development Corporation Limited (Webel)

Nandan Bhattacharya, Managing Director

Webel Bhavan, Block EP & GP, Sector V

Bidhannagar, Salt Lake

Calcutta 700 091

West Bengal

Telephone    +91 33/357 1710, 357 7565

Facsimile      +91 33/357 1711, 357 1739


West Bengal Government

Prof. S. K. Sen , Minister-in-Charge, Electricity, Science, Technology, and Non-Conventional Energy Sources

New Secretariate Building (7th Floor)

1, Kiran Shankar Roy Road

Calcutta 700 001

West Bengal

Telephone    +91 33/248 0706

Facsimile      +91 33/248 6436

Wireless Planning and Coordination Wing (WPC)

R.N. Agarwal, Wireless Advisor

Sanchar Bhawan

20, Ashoka Road

New Delhi 110 011

Telephone    +91 11/375 5420

Facsimile      +91 11/371 6111

 “Internet Services” advertised in the 1997-1998 Tata Press Yellow Pages for Mumbai

Absolute Networks (two listings)

Modems, Intranet, Web Pages/Server, Training

Advantage Biz Info Services Pvt Ltd

Top Internet Ad Agency, Training

C-Net Comm & Off Auto Services

VSNL’s authorized marketing and support agent; Internet/Modem/Software/Training

C-tel Infotech Ltd

Internet, Networking, LAN, WAN

Chevron Systems

Internet Services, Computers, Training

Cyber Systems

Modem, Internet, Web Pages/Server, TCP/IP, Software Training

Dan Marketing

Internet, Homepages, Modems, Software

DBS Internet Services

Intranet Development, Web Hosting, Cyber Café

Digitech Computers (ad)

Zoltrix fax Modems, Internet Phone: “Voice communication anywhere in the world through Internet @ 1 Re [Rupee] per min”

Do All Systems

Internet Presence, Webpage Design/Host

Dynamic Engineering

ENET, Modems, Hardware

Front Point Systems


Global 1 India

E-Mail, Website Development, Magazine Publishing on the Net

(listing includes .com Web URL)

Greenrose Computer Services (P) Ltd.

Networking Specialists

Imperial Communication Systems

Internet Home Page

In-Depth Elextronix

PC/LAN Internet Services, Datacom/MIS Integrator

Indiaspace Network

Internet Homepage Providers

Internet Resources Pvt. Ltd.

“Web Solution Providers giving Services in Internet related activities—We Design, Setup & Maintain web sites for Individuals & firms wishing to go on the Net & Increase their media reach.”

(listing includes .com e-mail address and Web URL)


“Authorised Agents Of VSNL—All India. The Only ONE STOP INTERNET SHOP For CONNECTIONS, Training, Service Support, WEB PAGES/SITES Designing & Hosting, MODEMS Hardware & Software”

(listing includes GIAS e-mail address)

Karishma Marketers

Internet Services Provider

Lancomp Networking Solutions (ad)

Home Pages, Websites, Intranet, AT&T and AMP Structured Cabling Specialists


Hayes Modems, Complete Internet & Intranet Solutions

Logical Data Services

Internet Subscription, Advertising & Training

Merclin Exim Ltd

Internet Advertizing, Web Pages & Servers, Modem

(listing includes .com Web URL)

Minusheel Investments


Minushil Network

Internet Training, Fax/Modems, Connection/Renewal

Multinet Infosys Private Limited

Seminar, Training, Home Page, Website, Intranet

Narayana Electronics & Comm Ltd

Internet & Multimedia

Natural Vision

Website Developers & Designers

Netcom Distributors Pvt. Ltd. (four listings)

Internet Web Site Development, Domain Registration & Management, Live Video & Audio, Complete Internet Solutions, Web Publicity

(listing includes .com Web URL)

NetResult Co.

Web-Site Creation

(listing includes .com Web URL)

Nirmal Datacomm Pvt. Ltd.

Zyxel Modems & Internet


Websites Developed on Internet, Intranet, Domains, Commercial Photography

Pure Tech India Ltd.

Internet & Software Services

Quality Utilities

Dealers: Motorola Modems, Netscape, E-mail

Ravi Database Consultants Ltd. (ad)

News, Information, Entertainment, Electronic Commece, Web Sites, Internet Marketing, Intranets, Extranets

(listing includes e-mail address)

RD-Link Systems

Website, Internet-Intranet Setup, Modems

Soni Digital Pvt. Ltd.

Website & Home Page

Sygnet Internet & Allied

Turnkey Web Solutions, Hosting, Design, Programming, Transaction Servers, Intranet Design & Commissioning, Research & Project Consultancy

The Net Computer Associated Service

(listing includes .com Web URL)

World Information Technology Solutions

Internet Consultancy, Web-Site Designing

Tab C  National IT Task Force Action Plan

Information Technology Action Plan


·        Preamble

·        Information Technology Action Plan

Ø     Introduction

Ø     Info-Infrastructure Drive

Ø     Target ITEX50

Ø     IT for all by 2008

·        Annexure

Ø     Notification: Appointment of Task Force

Ø     List of Co-opted Members


In the history of civilisation, no work of science has so comprehensively impacted on the course of human development as Information Technology (IT). Undoubtedly, IT has been the greatest change agent of this century and promises to play this role even more dramatically in the coming decades. IT is changing every aspect of human life—communications, trade, manufacturing, services, culture, entertainment, education, research, national defence and global security. IT is breaking old barriers and building new interconnections in the emerging Global Village. IT has also become the chief determinant of the progress of nations, communities and individuals.

For India, the rise of Information Technology is an opportunity to overcome historical disabilities and once again become the master of one’s own national destiny. IT is a tool that will enable India to achieve the goal of becoming a strong, prosperous and self-confident nation. In doing so, IT promises to compress the time it would otherwise take for India to advance rapidly in the march of development and occupy a position of honor and pride in the comity of nations.

The Government of India has recognised the potential of Information Technology for rapid and all-round national development. The National Agenda for Governance, which is the Government’s policy blueprint, has taken due note of the Information and Communication Revolution that is sweeping the globe. Accordingly, it has mandated the Government to take necessary policy and programmatic initiatives that would facilitate India’s emergence as an Information Technology Superpower in the shortest possible time.

This commitment to Information and Communication Technology in the National Agenda for Governance has been forcefully articulated by Prime Minister Shri Atal Bihari Vajpayee on a number of occasions. In his first televised addresss to the Nation on March 25, the Prime Minister declared that promotion of Information Technology would be one of his Government’s five top priorities.

In his speech at the CII Annual Session on April 28, 1998, the Prime Minister said: “This is one area where India can quickly establish global dominance. India can be fully competitive in this area with tremendous pay-offs in terms of wealth creation and generation of high quality employment.”

The Prime Minister announced at the CII Annual Session the Government’s resolve to set up, within 30 days, a National Task Force on Information Technology, which would formulate the draft National Informatics Policy.

Accordingly, the Office of the Prime Minister issued a Notification on 22nd May, 1998 constituting a National Task Force on Information Technology and Software Development. This Task Force is chaired by Shri Jaswant Singh, Deputy Chairman, Planning Commission and co-chaired by Shri N. Chandrababu Naidu, Chief Minister of Andhra Pradesh and Dr. M.G.K. Menon, former Minister of State for Science and Technology. Its members include eminent representatives from the Government, industry and academia.

The Prime Minister has given five main tasks and 15 terms of reference to the IT Task Force (see Annexure). The tasks include recommending, within one month, immediate steps that the Government needs to take to remove bottlenecks in the path of rapid development of IT in India and give a big boost to Indian IT and software industry.

The Task Force has completed its deliberations on this immediate task and is pleased to submit its first report to the Prime Minister. This report, called the Information Technology Action Plan, contains 108 recommendations covering both bottleneck areas and broad promotional measures that are crucial for boosting IT in India.

These recommendations cover a wide spectrum of issues relating to telecommunications, finance, banking, revenue, commerce, electronics, human resource development, defence and rural development. They address critical national needs in the areas of information infrastructure, Internet access, software development and exports, hardware manufacture, electronic commerce, R&D in IT, manpower training and education.

Software exports has received much attention of the Task Force. Recognising India’s competitive advantage in this area, the Action Plan has made many recommendations aimed at enabling Indian exporters to capture a large share of the global software market in a short time.

A unique promotional campaign suggested in the report is OPERATION KNOWLEDGE, which aims at universalising IT and IT-based education at all levels of the education pyramid in India.

A notable feature of these recommendations is the conscious effort of the Task Force to give Information Technology a pro-people and pro-development thrust. These recommendations flow from a perspective that India can become a strong IT power only if information technology reaches out to the masses in rural areas and in small towns and if its use in Indian languages can also be given major encouragement.

Taken together, the recommendations in the Information Technology Action Plan significantly broaden and deepen the process of economic reforms by encouraging competition, entrepreneurship and innovation—the three priniciples which are cardinal for Indiaís progress in the emerging knowledge-driven global economy.

The Task Force is confident that the implementation of these recommendations will send a strong signal to people within India and abroad that India can swiftly ride on the Information Superhighway.

Activities of the Task Force till date

The Office of the Prime Minister issued a Notification on 22nd May 1998 constituting a National Task Force on Information Technology and Software Development. Dr. M.G.K. Menon, Co-Chairperson of the Task Force, Dr. N. Seshagiri, Member-Convener, and Shri Sudheendra Kulkarni of the PMO met Shri Jaswant Singh, Deputy Chairman, Planning Commission and Chairperson of the Task Force on 26th May 1998 for finalising the guidelines regarding the deliberations of the Task Force.

The Task Force created a Web Site on the Internet, with a web-letter from the Chairman, inviting suggestions from IT professionals around the world. On the basis of a number of useful reports on the topic prepared earlier by various organisations like the Planning Commission, Ministry of Commerce, Department of Electronics, NIC, Government of Andhra Pradesh, as well as industry associations like NASSCOM, MAIT and ESC and the suggestions given by the various members of the Task Force, the Member-Convener prepared a Basic Background Report (BR-1) and hoisted the same on the Web. More than 3,000 suggestions have been received on the Web from IT professionals around the world.

The Task Force held a number of preparatory meetings, and several formal and informal meetings with the Ministers concerned and their Secretaries and senior officials as per the following schedule:

26 May, 1998                          :           Meeting with the Deputy Chairman, Planning Commission & Chair-person of the Task Force

12, 13 & 15 June 1998            :           Preparatory meetings in New Delhi under the chairmanship of Professor M.G.K. Menon, Co-Chairperson of the Task Force

16 June 1998                           :           Meeting in the Department of Telecommunication

18 June 1998                           :           Meeting with the Chief Minister of Maharashtra, senior officials of the State Government and scientists and academicians and industry representatives in Mumbai

20 June 1998                           :           Meeting with the Wireless Adviser, Government of India

22 & 23 June 1998                  :           Meeting with the Minister for Communications

23 June 1998                           :           Meeting with Chairman, Telecom Commission

24 June 1998                           :           Meeting with Scientific Adviser to Raksha Mantri & Secretary, Defence (Research)

25 June 1998                           :           Meeting with Finance Minister

25 June 1998                           :           Meeting with Chief Minister of Andhra Pradesh & Co-Chairperson of the Task Force

26 June 1998                           :           Meeting with Finance Secretary

27 June 1998                           :           Meeting with Finance Secretary

29 June 1998                           :           Meeting with Finance Secretary

July 1, 1998                             :           Meeting with Finance Minister

July 1, 1998                             :           Meeting with Wireless Adviser & Defence Ministry officials

This is the first time in India that representatives of so many ministries, departments, industry associations, business houses, educational institutions and State Governments interacted so intensively and in such a short period of time to cover so many bottleneck and promotional areas in Information Technology. It is also the first time that agreement was reached and concurrence received on most of the points in the Action Plan. This, the Task Force believes, augurs well for its early and effective implementation.

Future Activities

After submission of the first report on bottleneck and immediate promotional issues, the Task Force will begin work on the more substantive work of formulating the draft National Informatics Policy. Towards this end, it will soon set up Working Groups on various specific subjects, on which representatives from Government, industry, academia and other sections of society from across the country will be represented. A few of the Working Groups have already started their work.

The Task Force also plans to identify a large number of national missions which will be so designed as to make visible and catalytic impact on the use of IT in India.

In order to broadbase its consultations, the Task Force has drawn up a plan to visit Bangalore, Hyderabad, Calcutta and Guwahati in the coming weeks. It has already held one such meeting in Mumbai on June 18, 1998.

Within the next ten days, the Task Force will prepare a Vision Statement whose aim will be to excite and energize the people of India, creating the faith in them that Information Technology vitally aids personal growth and national growth. It will also embark on an awareness creation strategy for the effective articulation and dissemination of that Vision.

The Information Technology Action Plan follows.

National Task Force on Information Technology

and Software Development

Information Technology Action Plan

The Government of India, recognising that the impressive growth the country has achieved since the mid-Eighties in Information Technology is still a small proportion of the potential to achieve, has resolved to make India a Global IT Superpower and a front-runner in the age of Information Revolution. The Government of India considers IT as an agent of transformation of every facet of human life which will bring about a knowledge based society in the twenty-first century. As a first step in that direction, the following revisions and additions are made to the existing Policy and Procedures for removing bottlenecks and achieving such a pre-eminent status for India.

The revisions and additions are aimed at accomplishing the following basic objectives:

i)        Info-Infrastructure Drive: Accelerate the drive for setting up a World class Info Infrastructure with an extensive spread of Fibre Optic Networks, Satcom Networks and Wireless Networks for seamlessly interconnecting the Local Informatics Infrastructure (LII), National Informatics Infrastructure (NII), and the Global Informatics Infrastructure (GII) to ensure a fast nation-wide onset of the INTERNET, EXTRANETs, and INTRANETs.

ii)       Target ITEX - 50: With a potential 2 trillion dollar Global IT industry by the year 2008, policy ambiance will be created for the Indian IT industry to target for a $ 50 billion annual export of IT Software and IT Services (including IT-enabled services) by this year, over a commensurately large domestic IT market spread all over the country.

iii)     IT for all by 2008: Accelerate the rate of PC / set-top-box penetration in the country from the 1998 level of one per 500 to one per 50 people along with a universal access to Internet/Extranets/Intranets by the year 2008, with a flood of IT applications encompassing every walk of economic and social life of the country. The existing over 600,000 Public Telephones/Public Call Offices (PCOs) will be transformed into public tele-info- centres offering a variety of multimedia Information services. Towards the goal of IT for all by 2008, policies are provided for setting the base for a rapid spread of IT awareness among the citizens, propagation of IT literacy, networked Government, IT-led economic development, rural penetration of IT applications, training citizens in the use of day-to-day IT services like tele-banking, tele-medicine, tele-education, tele-documents transfer, tele-library, tele-info-centres, electronic commerce, Public Call Centres, among others; and training, qualitatively and quantitatively, world class IT professionals.

I. Info-Infrastructure Drive

With a target of 30 percent of annual growth rate from the 1998 level of Fibre Optic backbone of 75,000 route kilometers, VSATs of aggregate capacity of over 300 Megabit Per Second, Satellite Transponders of aggregate capacity of more than 3000 Megahertz and in the corresponding ‘last mile’ Wireless Communication as well as Data Communication based value added services, the Data and Multimedia Info-Infrastructure Policies are liberalised as under:

(1)        INTERNET access nodes will be opened by DoT and authorised ISPs at all District Headquarters and local charging areas by 26th January 2000. As an interim measure, and till nodes are provided in all local charging areas, access to nearest INTERNET access nodes will be on local call rates with effect from 15th August 1998. ISPs will be responsible for ensuring that this facility is not misused for telephone traffic.

(2)        Voice & Data Communication is permitted for IT Software Development and IT Services on dedicated or leased circuits, but no telephone traffic is permitted. Surcharge on 64 Kbps and higher capacity circuits for voice-cum-data applications is withdrawn with effect from 15th August 1998.

(3)        Doubling of the lease rental charged by DOT for high speed data circuits leased by Closed User Group (CUG), Licensees of Basic Service, Cellular Service and other Value Added Services and users shall be reduced to single normal lease rental charge.

(4)        Requests made by public sector Software Technology Park (STPs) or Private Sector STPs or IT promotional organisations approved by the Government for release of bandwidth shall be acted upon by the VSNL by intimating INTELSAT within two weeks of receipt.

(5)        Setting up of Central call centres by IT Service Providers shall be permitted for which DOT and other Basic telecom Service Providers will make available bandwidth.

(6)        Intelligent Network (IN) Services including free phone and premium Service (e.g., 1-800 and 1-900) Services shall be introduced by DoT by 31 December 1998 in several cities over an Intelligent Network (IN) Platform.

(7)        For setting up ISP Operations by companies, there shall be no license fee for first five years and after five years a nominal license fee of one rupee will be charged.

(8)        The monopoly of the VSNL on International Gateway for INTERNET shall be withdrawn and authorised public/government organisations will be allowed to provide INTERNET Gateway access directly without going through VSNL Gateways. Private ISPs are allowed to provide such Gateways after obtaining Defence clearance. Suitable monitoring mechanisms will be put in place to take care of security considerations.

(9)        The Railways, Defence, State Electricity Boards, National Power Grid Corporation as well as organisations like ONGC, GAIL, and SAIL who have rights of way shall be allowed to host fibre optic backbone. These organisations shall be allowed to provide service to the public based on this backbone by having an interface with the existing or new public networks, but without necessarily having to go through DOT network.

(10)      Networks such as NICNET, STPs, as well as private networks shall be allowed inter-connectivity without necessarily having to go through the DoT’s INET network.

(11)      Providing access to INTERNET through authorised Cable TV shall be permitted to any service provider without additional licensing.

(12)      The “last mile” linkages shall be freely permitted either by fibre optic or radio communication for IT application enterprises, IT promotional organisations and ISPs. In case of radio linkages, coordination by the Wireless Adviser will be observed to avoid frequency interference.

(13)      The radio frequency band in the range of 2.4 - 2.483 GHz shall be open as ‘public wireless’ for any Government organisation or PSU or Private Sector Company to set up Spread Spectrum based non-interference type Wireless data/multimedia communication equipment subject to a maximum of 4 Watt EIRP; WPC will periodically issue a district-wise directory of two or three selected subbands of 10 MHz each for each of the districts on the criteria of least congestion and reserve these subbands maximally for the exclusive use of Spread Spectrum Communication as above. The use of the band will be on the basis of non-interference, non-protection and non-exclusiveness. Private sector, Public sector and Government operators shall bilaterally obtain Defence Clearance for location, the area covered and the frequency sub-band: The Private Sector Units will be required to obtain MHA clearance directly; The security agencies shall convey their decision within 30 days of application failing which the application would be deemed to have been cleared from the security angle. If cleared, the Private and Public Sector operators shall be required to obtain a registration and automatic license directly from WPC by producing the copies of security clearances; the Government operators will directly register with WPC; WPC will be empowered to monitor the violation of the above conditions and impose penalties on defaulters in three stages: Written warning, monetary penalty and debarring for two years. A Public Wireless Technical Audit Unit comprising a representative each from the Defence, DOT, NIC, and from NASSCOM for the limited purpose of representing private user interests, shall monitor the implementation of the above policy

(14)      Data communication requirements for Electronic Commerce(EC/EDI) shall be met by DoT in a liberal framework by assigning the highest priority under their priority classification if the EC/EDI requirement is certified by authorities in Government authorised by the Ministry of Commerce.

(15)      Public TeleInfo Centres (PTIC) having multimedia capability specially ISDN Services, Remote Database Access, Government and Community Information systems, Market Information, Desk Top Videoconferencing, TeleInfo, and INTERNET/Web Access Services shall be permitted and encouraged by the Government. DoT and other Basic Service Providers, Value Added Service Providers and authorised IT promotional organisations shall be permitted to promote these services on non-exclusive basis. No license fee will be charged for operating these services and the usual tariff, where applicable, will be payable by the PTIC Service providers/franchisees. Efforts will be made by DoT and other Service Providers to upgrade STD/ISD PCOs to convert them into these powerful PTICs for which ISDN or other digital facilities shall be provided on priority without necessarily having to make additional investment on this account.

(16)      DOT shall take suitable action to delicense Multimedia services, including FAX, provided by PCOs.

(17)      To enhance the pace of PC and INTERNET penetration in remote and far flung areas in the country, the Defence Services shall enable provisions of connectivity for ciivilian applications to their communication backbone.

(18)      Existing Software Centres by themselves may not be able to fulfill the high targets now set for the IT industry by the year 2008. International experience has shown that hi-tech industries flourish essentially in the rural hinterland adjacent to cities with modern telecom and communication infrastructure and top class hi-tech educational/research institutions. India will promote such “Hi-tech Habitats” in the rural hinterland adjacent to suitable cities. For this purpose suitable autonomous structures will be designed and progressive regulations will be framed to facilitate infrastructurally self-contained self-financed Hi-Tech Habitats of high quality. Initially, five such Hi-Tech Habitats shall be planned and implemented in the rural hinterland of the cities: Bangalore, Hyderabad, Pune, Delhi, and Bhubaneswar. It is estimated that progressively 50 such Hi-Tech Habitats can be viably set up by empowering the State Governments to autonomously nucleate them within a technologically progressive and administratively liberal set of guidelines to be prepared by a special Working Group on Hi-Tech IT Habitats to be set up by the Task Force.

II. Target ITEX-50

For creating a congenial ambiance for exporters of IT Software and IT Services (including IT enabled services) to reach the export target of US $ 50 billion by the year 2008, the following incentives shall be provided:

(19)      (a) Definition: “IT Software” means any representation of instructions, data, sound or image, including source code and object code, recorded in a machine readable form, and capable of being manipulated or providing interactivity to a user, by means of an automatic data processing machine falling under heading “IT Products,” but does not include “non-IT products.” “IT service” is defined as any service which results from the use of any IT software over a system of IT products for realising value addition. The term “IT Industry” shall cover development, production and services related to IT Products. The term “IT Software” shall be substituted in place of “Computer Software” in all notifications.

            (b) Finance Ministry (CBEC) shall introduce a new classification called, “Information Technology (IT) Products” including Computer, Digital/Data communication, and Digital/Data Broadcasting products, by recognising the progressive technological convergence of these three categories and in line with the classification list in Attachment A (Section I and Section II) of the WTO (ITA) Agreement and, additionally, Data Communication equipment.

            (c) IT Software shall be entitled for zero customs duty and zero excise duty.

(20)      A revised Notification giving the following new schedule for the Government of India acceding to the WTO-ITA Ministerial Declaration of 13 December 1996 at Singapore shall be issued by the Ministry of Finance:

            In Attachment A, Section I and II of WTO-ITA:

(a)        Duty shall be brought down to zero by 1 January 1999 on the following items: Parts & components excluding populated PCBs in HSN 8473.30, all storage devices in HSN 8471.70, ICs above Rs. 1000 in HSN 8542, Stepper Motors in HSN 8501.10, Colour Graphic Display Tube in HSN 8540.40 and Deflective components for Colour monitor in HSN 8504.

(b)        Out of the 217 items listed in ITA-I, 94 items which were proposed earlier for zero duty by 1st January 2000 shall now be advanced to 1st January 1999.

(c)        The remaining items earlier proposed for zero duty by the 1st January 2003/2004/2005 shall now be advanced to 1 January 2002.

Concomitantly, the following schedule will be adopted:

(d)                   Duty on Capital Goods for the manufacture of items in (c),

                        wherever applicable, becomes zero by 1 January 2000.

           Inputs/raw materials for the manufacture of the items in (c), wherever applicable, becomes zero by 1 January 2001

           Dual purpose items will be taken care of, wherever applicable, by allowing duty drawback benefits or by treating the supplies to the IT industry as deemed export.

           Zero excise duty is concomitant with zero Customs duty with in-phase reduction.

Additionally, other suitable supportive measures shall be taken to encourage Indian hardware industry to become globally competitive in the light of the revised WTO-ITA schedule.

 (21)     Customs duty on import of CD-ROMs or Optical Disc Media or Magnetic Media containing text , data or multimedia as content shall be charged only on the media and not on the contents.

(22)      Imported IT Products shall be permitted to be taken out of bonded offices or out of Electronics/IT Units under EOU/EPZ/STP/EHTP Schemes after a period of 2 years from the date of import if these are donated to recognised educational institutions, Government organisations and registered charitable hospitals, etc., as defined in the Clause 9.19 of the Handbook of Procedures (Volume I) of the EXIM Policy through a customs notification.

(23)      IT Software and IT Services companies, being constituents of the knowledge industry, shall be exempted from inspection by Inspectors like those for Factory, Boiler, Excise, Labour, Pollution/Environment etc.

(24)      With technological advancements in Wide Area Computer-Communication networks, which have brought about “Virtual Technology Parks” in which IT Software and IT services are developed through online integration of software and services subsystems from widely separated locations in the country, the concept of physical bonding has become obsolete. Accordingly, Software developers/exporters are exempted from Customs bonding at various export promotion schemes including STP/EOU/EPZ, etc. The export obligation shall be the same value as given under the EPCG Scheme. Existing bonded units under the various Software Export Promotion schemes will also be considered under the above scheme.

(25)      A clarification shall be issued by CBEC that Service Tax is not applicable on computer software development industry.

(26)      The Ministry of Civil Aviation shall issue the following notifications/ amendments in the regulations :

                       Export shipment time for air cargo will be reduced to less than 24 hours.

           “Known Shipper” will be introduced to avoid delays on account of cooling off period.

           Cargo companies and other associated agencies to allow consolidation of export air cargo.

(27)      Section 80 HHE of the Income Tax Act provides for income tax exemption to profits derived from software and services exports. This section shall be amended as follows:

           The existing formula will be so changed that tax on profits shall not have any relation to domestic turnover.           

           The definition of software and export turnover will be changed so as to include IT services exports.

           The benefits of this Section for income tax exemption to profits from exports will be extended to supporting IT Software & IT Services developers .

(28)      IT software and IT services shall be deemed as manufacturing activity for the limited purpose of applicability of Section 10 (15) (iv) of the Income Tax Act.

(29)      IT Software and IT Services shall be exempted from withholding tax through amendments in the ‘explanation’ of Section 9 of the Income Tax Act.

(30)      For individuals buying IT products including computer, the expenditure shall be deductible under Section 88 of the Income Tax Act.

(31)      No gift tax shall be charged for the giver or Income Tax for the receiver on PCs upto Rs. 30,000 of the original purchase price.

(32)      For any investment made in IT products and IT software 100 % depreciation shall be allowed in two years for which Ministry of Finance shall take suitable action.

(33)      As the traditional method of asset-based funding of working capital would not meet the adequate and timely requirements of fund of the software sector, a differential and flexible approach shall be adopted by giving special dispensation towards working capital requirements of this sector in view of the unique nature of the industry. Accordingly, RBI shall issue, by 15th August 1998, new guidelines with regard to working capital requirements for the IT software and services sector which would be based on simple criteria such as turnover. Banks shall be advised to give 25 percent of the contract value for 18 months, with the first six months as term loan (without collaterals) and from the 7th month onwards annualized Cash Flow Statements shall be accepted instead of collaterals.

(34)      IT software and services industry shall be treated as a Priority Sector by banks for the next five years. This would help to meet the requirements of IT software and services exports, and also the IT industry and applications within the country. Major banks will be advised to create specialised IT financing cells in important branches, where IT Software and Services units are sufficiently large in number. Performance in this dimension will be monitored by the Ministry of Finance.

(35)      Against the present estimate of Rs. 400 crores of working capital for the industry, the amount shall be increased to around Rs. 1200 crores by the year 2000 subject to the broad criteria of pro-rata increase for the prospective requirements 24 months ahead as compared to the actuals of the current requirements at any given time. As quantitative targeting is not appropriate, a system will be put in place which would enable substantial increase in working capital provided by the banks.

(36)      Bank lending to IT Software and Services exporters shall be made eligible for RBI refinancing with sufficiently low interest rates.

(37)      The banks shall be allowed to invest in the form of equity in dedicated venture capital funds meant for IT industry as part of the 5 percent of increment in deposits currently allowed for shares.

(38)      Banks/FIs like ICICI, IDBI, UTI and SBI shall set up joint ventures with Indian or foreign companies for setting up of at least four different venture capital dedicated funds of a corpus of not less than Rs. 50 crores each to cater to the credit need of the industry. Such venture capitalists may be allowed to set off losses in one invested company and profit in another invested company during the block of years for the purpose of income tax.

(39)      The Company’s Act shall be amended to facilitate issuance of Sweat Equity to employees. A new definition No. (66) will be added after definition No. (65) in Clause 2 as under:

                        “(66) Sweat Equity means equity allotted to promoters, Directors, or employees for providing any intellectual property or value addition to the Company.”

(40)      Ministry of Finance shall include IT software and IT service sector while issuing general guidelines for dual listing of companies, as well as while considering two-way fungability for ADRs/GDRs.

(41)      • Dollar Linked Stock Options to employees of Indian Software companies were announced in the 1998 Budget and detailed guidelines on this have been issued by DEA, Ministry of Finance. This shall be modified in accordance with the definition of IT Software and IT Services given under (19)(a) and (b) above.

            • Employee Stock option schemes for stock listed in India would also be encouraged. Also, clarification shall be issued that income tax is applicable only at the time of sale and not at the time of excise of option.

(42)      Recognising the high velocity of business, high degree of competition and fast technological obsolescence faced by the IT software and IT service exporters, RBI shall be maximally accommodate the following:

(a)        A blanket approval for overseas investment for acquisition of software/IT companies across the board for software exporters with previous three years cumulative actual export realisation in excess of US $ 25 million to be given up to 50 % or US $ 25 million, whichever is lower, out of the cumulative actual export earning of the previous three years. This is subject to submission of a certificate of software industry by appropriate authorities.

(b)        For FERA approvals beyond this limit, RBI would set up a mechanism for expeditious processing of applications from this sector. This shall be announced by 15 August 1998.

(c)        For overseas ventures, a dispensation shall be given for allowing the capitalisation of both goods and services; RBI shall accordingly notify this in consultation with Commerce Ministry by 15 August 1998.

(d)        As the present allowable limit of 70% of the contract amount for expenditure abroad does not provide flexibility for utilisation for the purpose of general corporate objectives or for business growth purposes, RBI shall permit IT exporters to freely spend upto 5% of the export proceeds abroad (out of the total 70%) for miscellaneous/sundry purposes to give full flexibility. Also, a new list of allowable expenses under the 70% limit would be worked out by RBI in consultation with NASSCOM.

(e)        RBI shall issue revised EEFC guidelines to eliminate restrictions on staggered remittance, second and higher generation subsidiaries and also to allow 20% of the EEFC balances for the use on the following:

 i)         Advance remittances for downloading software (upto US $ 1 lakh per transaction).

 ii)        Purchase of equipment and related expenditure

iii)         Miscellaneous expenses not detailed in EEFC guidelines (upto 5% ) of EEFC balances. Such EEFC accounts shall be permitted for making payments from offshore branches of Indian banks directly.

(f)         Use of International Credit Cards (ICC) abroad for a variety of purposes required by the IT Software and IT Services sector shall be permitted, the detailing of which will be carried out by RBI and notified by 15 August 1998, in particular:

 i)         All payments currently made under Exchange Earnings Foreign Currency (EEFC) Account shall also be allowed to made through International Credit Cards (ICC). Advance payment for IT software and IT services shall be permitted to be done through ICC for which RBI will issue a notification. Notification shall be issued that ICC may also be used for paying for IT Software and IT services purchased over INTERNET or EXTRANET and also for registering domain names.

 ii)        RBI shall issue a modified and simplified SOFTEX form required for IT Software and IT Services export by 15 August 1998.

(43)      In the EPCG scheme a system of self-declaration shall be introduced with 100% post-checking subject to punitive penalty for default.

(44)      The value limit for import of IT Products including personal computers shall be reduced from Rs. 1.50 lakhs (c.i.f) to Rs. 70,000 (c.i.f).

(45)      Private and public organisations providing IT infrastructure shall be included for duty exemption for importing capital goods. Such service providers, in view of such capital goods imported, shall undertake the export obligations as provided for import of capital goods in the EPCG Scheme.

(46)      The India Brand Equity Fund Scheme operated by the Ministry of Commerce shall be made available for Software companies with lower interest and longer interval.

(47)      On-site IT Services should be made easier by combating Visa regulations of the recipient countries through a planned diplomatic strategy by the Ministry of External Affairs and the Indian Missions abroad for which MEA will create a suitable dedicated structure. This will also include signing of totalisation agreements, wherever necessary so as to maintain the competitive advantage of Indian companies.

(48)      Returns from package software development shall be increased by enabling Indian Marketing companies to set up wholesale companies abroad. They shall also be given maximum flexibility in organising the marketing of package software from India through INTERNET.

(49)      For benchmarking our country with our emerging competitors, a study shall be conducted at Government cost once in two years by internationally reputed consultancy companies.

(50)      Restrictions on the location of IT software and IT Services (including IT training) companies in residential areas shall be removed.

(51)      To enable organisations and companies to identify, explore and plan strategies for Large Niche Markets like Y2K and Euro, nationally and corporate wise, all applicable provisions shall be made applicable on higher priority basis. Through MOC and DOE funds ‘India Pavilions’ shall be set up in several major IT exhibitions around the world through the initiative and coordination of ESC and NASSCOM.

(52)      Recognising the catastrophic effect of the Y2K problem for solving which a few hundred billion dollars are being spent around the world, an immediate investment of Rs. 700 crore as corpus funds shall be mobilised to control the crisis in critical Government, Public and Private organisations and services; efforts to sensitise such organisations in the country facing the crisis shall be taken up by the Government immediately including issuance of Government orders for strict compliance in a time bound manner; a High level empowered Task Force with respresentatives from the Government, Industry Associations, Banks and Financial Institutions, Defence Services, Utility and other Public Service organisations, Railways, among others, shall be constituted by the Government of India.

(53)           • ‘Mega Web sites’ shall be created on INTERNET for promoting marketing and

 encouraging Indian Software products and packages under multiple initiatives.

            • Creation and hosting of websites on servers located in India will be encouraged.

(54)      Under DEPB Rupee trade arrangement, IT Software, IT Services and IT product export to Russia shall be permitted with promotional support given by the Electronics and Software Export Promotion Council (ESC), STP, etc.

(55)      All promotional and liberalisation policy instruments available to IT Software and IT Services shall be made available to IT enabled services including the Information Content Industry by classifying IT enabled Services as tantamount to IT Software and IT Services.

(56)      For promoting Indian Software Packages (system as well as application software) users shall be given fiscal incentives for buying Indian packages. A special screening mechanism will be worked out for identifying the more promising packages developed in India and giving consistent support by the Government as well as the industry for ensuring acceptance in international markets.

(57)      Private STPs shall be encouraged to be set up by combining the provisions under (4), (7), (8), (12), (13), (24), (43), (45), (54), and (55), among others.

III. IT For All By 2008

For enabling a proactive drive for “IT for all by 2008,” the following new policy instruments shall be devised and activated.

“Operation Knowledge”

Recognising Information Technology to be a frontier area of knowledge, and also a critical enabling tool for assimilating, processing and productivising all other spheres of knowledge, the Government shall launch “OPERATION KNOWLEDGE.” The aim of this national campaign will be to universalise computer literacy and also to spread the use of computers and IT in education. “OPERATION KNOWLEDGE” shall be developed into a comprehensive policy within the next three months. However, the following initiatives shall be taken for the immediate implementation of some of its key objectives:

(58)      The Government shall soon launch three schemes—Vidyarthi Computer Scheme, Shikshak Computer Scheme and School Computer Scheme—to enable every student, teacher or school respectively desirous of buying computers to do so under attractive financial packages. These schemes will be supported by a suite of initiatives such as lowering the cost of PCs, easy-instalment bank loans, computer donations by IT companies and other business houses, bulk donations of computers by NRI organisations, large-volume bargain price imports, multi-lateral funding, etc.

(59)      Computers and Internet shall be made available in every school, polytechnic, college, university and public hospital in the country by the year 2003.

(60)      All universities, engineering colleges, medical colleges and other institutions of higher learning in the country as well as Research and Development Organisations shall be networked for a supplementary programme of distance education for improving the quality of education before year 2000.

(61)      The seven national level institutions (IITs, IISc.) shall be encouraged to triple their output of students in IT by suitably restructuring the programme.

(62)      A National Council of IT Education comprising experts from both the industry and the academicia, shall be set up for defining courses and their content in the light of rapid developments taking place in Information Technology. The Council will also initiate a “Teach the Teachers” (3T) programme for upgrading on a regular basis the IT knowledge and skills of teachers.

(63)      An IT Course Module shall be made a compulsory component of all Degree Courses within a short period.

(64)      The setting up of Indian Institutes of Information Technology (IIIT) shall be implemented with urgency to make up for the lost time. Hi-tech institutions like the Indian Institute of Information Technology (IIIT) will be given the Deemed University status without insisting upon the mandatory three-year stipulation.

(65)      The Government shall promote the pairing of our Universities with centres of excellence in IT in developed countries.

(66)      Specific courses shall be launched in association with the Software Industry and IIMs to provide Project Management skills and develop specialised courses on Software Marketing.

(67)      The concept of SMART Schools where the emphasis is not only on Information Technology in Schools, but also on the use of skills and values that will be important in the next millennium, shall be started on a pilot demonstrative basis in each State.

(68)      An Institute for Computer Professionals of India shall be set up on the pattern of the Institute of Chartered Accountants of India; the Institute will be nucleated by NASSCOM with initial financial support from the industry and the Government. The Institute will be given the responsibility as an Accreditation Body for IT Education and Training Programmes with full Government recognition in addition to the DOEACC Programme of the Department of Electronics.

(69)      To enhance the knowledge base of IT related education at all levels the Government shall establish Information Technology, System Engineering and IT Security Institutes from within existing manpowr of the Armed Forces. The Centres of Excellence in IT Software and System Engineering in the Defence Services will be utilised to the national advantage.

(70)      Virtual Institutes in different parts of the country shall be set up to achieve excellence in distance education.

(71)      The talent and expertise of IT-trained ex-servicemen shall be utilised for IT penetration in rural India and Government will fully support this offer of the Armed Forces. A Plan will be prepared and implemented for utilising the services of the large number of IT literate defence personnel retiring every year for propagating the IT culture at sub-district levels.

(72)      A “National Qualification Framework” shall be established for computerised online objective system of knowledge acquisition; An “Educational Credit Bank” shall be implemented for giving flexibility to integrate credits earned in different institutions/systems towards the eligibility for diplomas and degrees.

(73)      A specialised sub-committee of this Task Force shall coordinate the setting up of National and State level Digital Libraries Projects.

(74)      A pilot project under the aegis of the National Task Force on Information Technology shall be launched in some lead districts which have already attained universal literacy, with the aim of achieving universal computer literacy in all the secondary schools in these districts. Alongside, the network of educational institutions in these districts will be assisted to maximise the induction of IT in order to create world-class talent at the top-end of the education pyramid. These pilot projects will be joint initiatives of the local educational institutions, respective State Governments and the Centre. In the first instance, such a pilot project will be launched in Dakshin Kannada and Udupi Districts in Karnataka on a substantive self-financing basis. Within a short time, the same will be extended to suitable districts in other States.

(75)      In view of the lower-than-national-average levels of technical and IT education facilities in Uttar Pradesh, Bihar, Madhya Pradesh and Rajasthan, several educational centres will be identified with a view to making them models for IT-based education and training at all levels. The aim of this initiative will be to promote IT education and awareness in Hindi-speaking States and thereby revitalise the Hindi heartland in all the fields of knowledge and knowledge-based enterprises. Allahabad shall be developed as the first such model IT-based education-cum-business centre. Within a short time, this initiative will be extended to other States which are underdeveloped in IT.

IT Penetration & IT Awareness

(76)      Government shall encourage the setting up of value-added network services including ATMs, Electronic Kiosks, Telephones, Smart Cards, etc., for providing a “One-Stop Non-Stop” service to the public.

(77)      To make IT a mass movement, an awareness creation strategy shall be worked out within two months and the structures for implementing the same shall be put in place.

(78)      A major promotional campaign shall soon be launched to boost IT in Indian languages. This campaign will be based on a multi-pronged approach, involving fiscal and other incentives for R&D, production, marketing and popularisation of IT products in Indian languages. This recommendation addresses the reality that India can become a major IT power only if IT penetration in the country deepens and widens-which in turn, is dependent on large-scale use of IT in Indian languages.

(79)      The Government shall take all the necessary steps to boost IT for agricultural and integrated rural development. Towards this end, a number of demonstration projects will be devised in each State taking into account the specific strengths and needs at the local level. A unique “WIRED VILLAGES” pilot project has been launched under the aegis of the National Information Technology Task Force on Information Technology at the Warananagar Cooperative Complex in Kolhapur District in Maharashtra. Efforts will be made to quickly replicate such projects in other states.

(80)      The Government shall take necessary measures to develop, productivise and use, in domestic and global markets, indigenous technologies in wireless telecommunication such as CorDECT, remote access switch, etc., to achieve the national objective of rapid, low-cost expansion of telephone and Internet connectivity in rural and remote areas. Similarly, promotional measures shall be taken to encourage technologies that bring IT and Internet to the masses through the vast network of Cable TV houses.

(81)      For promoting electronic commerce in a time-bound manner, a strict directive shall be given to Sea Ports, Airports Authority of India, DGFT, Banks, Container Services, Customs and Indian Railways in accordance with the programme approved in the tenth Export Promotion Board meeting.

(82)      Bar Coding of every item sold in the country shall be made compulsory within a five-year period.

(83)      The Armed Forces shall integrate far-flung and remote areas (Ladakh, North-East, Andaman & Nicobar Islands, Kutch, Lakshadweep and Minicoy Islands, border areas of Himachal and Rajasthan) with mainstream India, through IT penetration as part of their Civic Action Programme. The funds for this initiative shall be provided through the Government/Venture/Seed Capital.

Citizen IT Interface

(84)      The Cabinet has approved NIC’s proposal to make government Information, other than that having a bearing on security, available to the public. This decision shall be implemented by suitably empowering NIC to do so. This recommendation addresses the felt need for easy availability and extensive transparency of government information.

(85)      District Information System (DISNIC) Plan Programme shall be made widespread and databases updated online, shall be made available to the public and Panchayats, among others. Courts Information System(COURTIS), Parliament Information System (PARLIS), Computerised Rural Information System Programme (CRISP) and other such databases shall be updated online over NICNET and access to public facilitated .

(86)      A Citizens Charter for effective and responsive administration in terms of time-bound service to the public shall be framed and implemented under the coordination of the Department of Administrative Reforms & Public Grievances and hoisted on the official INTERNET Web Site “India Image” of the Government of India.

IT in Government

(87)      Each Department/Agency in the Central Government and State Governments shall be required to prepare a Five Year IT Plan.

(88)      1-3% of the budget of every Ministry/Department shall be earmarked for applying IT in the Department/sector; this investment will include not only the purchase of IT products, IT Software, but also for training and IT services; Reappropriation of the Department’s budget for the IT sub-budget head shall be within the delegated powers of the Head of the Department.

(89)      NIC, at the national level, and technology service organisations at the State level, shall establish ‘Framework Contracts’ with reputed suppliers to provide a wide range of IT consultancy, specialist services and IT products to Government agencies to reach the benefit of lower costs through bulk purchases.

(90)      India shall participate in international projects like “Government Online” Project of G-8 countries so as to not only learn from the experience of others but also to contribute to the global experience in planning and implementing projects to promote IT in Government.

(91)      Tele-commuting is recognised as a new modality of doing work in an office and labour laws accommodating the same shall be enacted. An option shall be given to employees, where feasible and efficient, to accomplish part of their work through telecommuting in the framework of “Management by Objectives” (MBO).

(92)      The Government of India shall set up a central repository of data elements in Government with the NIC and make it accessible through NICNET.

(93)      The recommendations of the TG-MAP Committee for Map and GIS Data Policy approved by the Committee of Secretaries under the Cabinet Secretary, shall be notified by the Ministry of Defence expeditiously.

(94)      A computerised National Inventory of Training pertaining to different areas shall be maintained.

(95)      A computerised Inventory of Government best practices for electronic access shall be maintained.

(96)      Government shall stipulate IT literacy as an essential requirement for all future Government and public sector employment; in the Annual Confidential Reports of government employees, a column shall be introduced regarding contribution to IT utilisation in the department/organisation.

(97)      A National Institute of Smart Government shall be set up to focus on all issues concerning IT-supported governance.

(98)      State Institutes of Public Administrations shall be re-engineered to help bring about IT-responsive State Governments.

(99)      Suitable floor space in Government buildings, which are not utilised during non-office hours, could be given to private educational institutions for IT training purposes in return for a proportionate number of free nominations of Government employees for IT training.

Data Security Systems and Cyber Laws

(100)    A National Computerised Records Security Document shall be prepared within three months for enforcing security requirements by consulting similar documents prepared by SAG, JCB, WESEE, etc.

(101)    An Information Security Agency shall be set up at the National level to play the role of Cyber Cop.

(102)    A National Policy on Information Security, Privacy and Data Protection Act for handling of computerised data shall be framed by the Government within six months.

(103)    Cyber infractions shall be addressed within the legal framework by the Ministry of Law, Justice and Company Affairs.

(104)    The cryptology and Cyber Security knowledge and experience developed by the Defence establishments shall be suitably transferred to the civilian information security agencies for wider dissemination in the country to increase information security, network security and bring about a greater degree of secure use of EFT, Digital Signature, etc.

(105)    The procedure of keeping records in paper form in public and private STPs shall be restricted to a maximum duration of two months after which the records shall be kept only in the Electronic/Magnetic/Optical media.

(106)    The Indian Telegraph Act of 1885, the Indian Post Office Act of 1888 and the Indian Wireless Telegraphy Act of 1993 shall be suitably modified in the light of the growing predominance of IT in day-to-day life. Suitable changes will also be made in other Laws/Acts, wherever necessary.

(107)    The draft set of Cyber Laws prepared by the Cyber Law Committee set up by the Committee of Secretaries, shall be approved by the Government with suitable modifications and implemented, as a first step, within six months.

(108)    All necessary instructions, notifications and amendements to procedures/Law shall be issued by the respective Ministries/Departments within three months.

Tab D  Domain Name Structure for .in TLD




Doc Type:   INFO

Doc Number: 001                                              Jan 1995


1.  Introduction:


    Every IP host on the Internet has a distinct IP address and

    a distinct domain name associated with it. These two disti-

    nct labels associated with a Internet host need to be

    mapped onto each other. A domain name such as ""

    should map onto an IP address such as "".

    Such a service is provided by the Domain Name System (DNS).

    The DNS is a set of protocols and databases. The protocols

    define the syntax and semantics for a query language to ask

    questions about information located by DNS-style names. The

    databases are distributed and replicated.  There is no

    dependence on a single central server, and each part of the

    database is provided in at least two servers.


    The allocation of IP addresses and domain names are centrally

    done. There is a specific registration process involved. The

    Internet Assigned Numbers Authority (IANA) is the central

    Internet authority that allocates IP addresses and domain

    names through the InterNIC. The allocations are either

    directly done by the InterNIC or by regional registries

    to whom the registration and allocation functions

    have been delegated. The RIPE NCC takes care of the

    allocations and registry in Europe and in the Asia Pacific

    region by the APNIC. (Note that definitions of Europe

    and the Asia Pacific in this context are not as per the

    existing political boundaries.) The InterNIC takes care of

    all else.


    The top-level domains in the DNS are EDU, COM, GOV, MIL, ORG,

    INT, and NET, and all the 2-letter country codes from the

    list of countries in ISO-3166 (Ref Appendix). In other

    countries, everything is registered under the 2-letter country

    code, often with some subdivision.  For example, in Korea (KR)

    the second level names are AC for academic community, CO for

    commercial, GO for government, and RE for research.


    India has a top level domain IN as listed in the ISO-3166.

    The second level subdomains registered under the IN domain

    are ERNET for the academic and research network, NIC for

    the government's network, NET for Internet Service Providers,

    RES for the research community, AC for the academic community,

    CO for commercial organisations and GOV for government offices

    and machinery. The IN domain administration is done by

    the National Centre for Software Technology, Bombay

    ( The IN domain will be solely

    managed by the Domain Registrar until either the registration

    activity is delegated to subdomains or there are separate

    Domain Registrars for each (or a set) of domains.


2.  Domain Naming

    ------ ------

    The third level subdomain provides the space for

    registering organisation names or organisation acronyms. Some

    typical patterns that can result are detailed below.


                  <org_name>.<org_category>.IN -



    Each organisation will register a domain as above. The organisation

    can then plan it's own subdomain hierarchy under the registered

    domain. For eg., a commercial organisation SOMEORG registers a

    domain The organisation then subdivides the

    domain space under this registered domain based on divison names

    resulting in domain names like

                 Publicity Division                  Finance Division                  Support Division


    The hostnames will then be prefixed to these domain names to yield

    names like



    For every registration made, an entry will be made in the DNS.

    A DNS server will be required to be run by every organisation.


3.  Domain Registration

    ------ ------------

    Domain name registration requests will be entertained only if your

    organisation has a valid IP address or has applied for one.


    To register your domain, obtain the form electronically from Fill up the form and mail it back

    to the same address. Alternately, you can retrieve it from

    URLs gopher:// OR ftp://soochak.ncst.


    The form, on receipt at will be

    circulated within a review group and you will be contacted

    for clarifications/ name clashes, if any. If there are none,

    then you will be allocated your domain name and intimated.


    Upon registration, you are required to run a DNS server

    if you have high speed Internet connectivity (atleast a

    64 Kbps leased data circuit). The NS entries will then be made into

    the primary name-server (for .IN domain) by NCST.


    The domain registration services are not charged at the moment

    and are being run on a voluntary basis. Soon enough, every

    registration will attract a charge. The charge will cover the

    registration costs and the cost of providing the secondary

    nameserver service and the registration information services.

4.  References


    [1]  Stahl, M., "Domain Administrators Guide," RFC 1032, SRI

         International, November 1987.


    [2]  Lottor, M., "Domain Administrators Operations Guide," RFC 1033,

         SRI International, November 1987.


    [3]  Mockapetris, P., "Domain Names - Concepts and Facilities,"

         STD 13, RFC 1034, ISI, November 1987.


    [4]  Mockapetris, P., "Domain Names - Implementation and

         Specification," STD 13, RFC 1035, ISI, November 1987.


    [5]  Dunlap, K., "Name Server Operations Guide for Bind,

         Release 4.3," UC Berkeley, SMM:11-3.


    [6]  Partridge, C., "Mail Routing and the Domain Name System,"

         STD 14, RFC 974, BBN, January 1986.


    [7]  Albitz, P., C. Liu, "DNS and Bind" Help for UNIX System

         Administrators, O'Reilly and Associates, Inc., October 1992.


    [8]  ACM SIGUCCS Networking Taskforce, "Connecting to the Internet -

         What Connecting Institutions Should Anticipate," FYI 16,

         RFC 1359, August 1992.


    [9]  Reynolds, J., and J. Postel, "Assigned Numbers," STD 2,

         RFC 1340, ISI, July 1992.


   [10]  Cooper, A., and J.Postel, "The US Domain," RFC 1480,

         June 1993

5.  Appendix


    Registration Form:


Registration Form for Registering in the IN Domain


Issued : February 1995


This form is used for registering under a subdomain in the IN domain. Please read the document accompanying this form for general information regarding the IN domain namespace. You could retrieve the same document from URLs gopher:// OR registration/domain/INNIC-0001.txt.


This form consists of four sections. The first section requests general details about the registrant, the second requests details of your current network and the last two sections about the name of your ISP and the sub-domain you are requesting to register.


PLEASE NOTE: that we DON'T entertain any documents in DOC,HTML,etc

format. This is necessary as they are required to be stored for official use. It would help us immensely in processing your request if you sent us clean seven bit ASCII files so that we can process your request at the earliest.


Also note that the information given below is maintained in a WHOIS database. Hence, it will be prudent that you fill in the correct details. Incomplete  forms shall be rejected outright.


Please allow seven working days for your request to be processed.

---------------------------- Cut Here -----------------------------


1. General


1.1 Name of Organisation/Institution:


1.2 Address of Organisation/Institution:

    (Please type as it would appear on your mailing label)


1.3 The name, title, postal address, e-mail and phone number of

    administrative contact:

    (Give the postal address only if it is different from the address

     in 1.2)


1.4 The name, title, postal address, e-mail and phone number of the

    technical contact:

    (Give the postal address only if it is different from the address

     in 1.2)


1.5 Give a brief description of your organisation. This description

    should clearly indicate the type of your organisation. (e.g. R & D,

    private limited company, public limited company, Govt. of India

    Undertaking, etc.) Educational institutions should mention the

    University to which they are affiliated.


2. Details of your IP Network

   (Please duplicate questions 2.1 to 2.4 if you have more than one IP

    Network at your organisation/institution. If the administrative and

    technical contacts are the same as those given in 1.2 and 1.3,


    use the phrase "as above" against the respective items. There is no

    need to duplicate the information.)


2.1 Network Number:

    (Please mention your IP network number here. For Eg: if you have a

     Class C address, your network number would be represented with its

     last byte as a zero. is a network number. Similarly,

     a Class B address will have the last two bytes as zeros.

     is a network number.)


2.2 Network Name:

    (Mention the name of your network here. Your network name is what

     you would call it or, in generic terms, the label you would give

     to your network. Please type the name in upper case.)


2.3 Administrative Contact:

    (Mention the name and complete contact information of the person

     from your organisation who would liaise with the domain registry

     for administrative issues.)


2.4 Technical Contact:

    (Mention the name and complete contact information of the person

     from your organisation who would liaise with the domain registry

     for technical issues.)


3. Name of your Internet Service Provider:

  (Through whom you connect to the Internet)


4. Domain Name Information:

   (Currently we have the following domains:

      --      for research organisations

       --      for commercial organisations

      --      for network service providers

      --      for government organisations

       --      for academic community

      --      for miscellaneous organisations

    Mention the domain name that you would like to register. Please

    also mention which of the above domains you would like to join.)


You are encouraged to send this form by electronic mail to If you cannot do so, you could post or fax this form to the following address:


            Domain Registrar

            National Center for Software Technology

            8th Floor, Air India Building

            Nariman Point

            Bombay - 400 021

            Telephone : +91-22-2024641, +91-22-2836924

            Fax: +91-22-6210139


Domain Registrar                  

Indian Domain Registration Services   Ph: +91-22-2024641,+91-22-2836924

National Centre for Software Technology             Fax: +91-22-6210139

8th Floor, Air India Building

Nariman Point, Mumbai - 21, India

[8]   Dilip Bobb, “Counter Sanctions,” India Today, 15 June 1998, < bobb.html> (9 September 1998).

[9]   Priya Ganapati, “Unveiled: the IT action plan,” Rediff On The Net: Infotech, 7 July 1998, <http://www.rediff. com/computer/1998/jul/06task.htm> (19 August 1998). Babus means literally “boys,” and is a pejorative term used by the British for the armies of Indian clerks that staffed their extensive colonial bureaucracy.

[10] Source: International Telecommunications Union (ITU), World Telecommunications Development Report: Universal Access, 4th ed., 1998 (Geneva: ITU, March 1998), unless otherwise indicated.

[11] U.S. Central Intelligence Agency (CIA), “India,” The World Factbook 1997, 20 March 1998, < cia/publications/nsolo/factbook/in.html> (7 July 1998).

[12] ibid.

[13] ibid.

[14] Stanley Wolpert, A New History of India, 5th ed., (New York: Oxford University Press, 1997), pp. 5-6.

[15] CIA, op. cit.

[16] Personal communication, P.S. Narotra (3 June 1998). Dr. Narotra is Director of STPI. Dr. Sheshagiri is credited with creating, and Mr. Vittal with implementing, the STP concept, which was subsequently adopted by Pakistan.

[17] STP Bangalore, The Software Technology Park Scheme, 18 March 1998, <> (27 July 1998).

[18] Narotra, op. cit.

[19] VSNL, VSNL: India’s Gateway, op. cit., p. 23.

[20] Jitendra Kohli, “Is Corporatisation Enough?,” Computers Today, 18 August 1998, < ctoday/081998/telecom.htm> (8 September 1998).

[21] “Grant or amendment of telecom licences not within TRAI jurisdiction, rule high court; clears decks for MTNL’s cellular entry,” Business Standard (17 July 1998); “Court Snubs TRAI, MTNL Cellular Foray Upheld,” Computers Today, 18 August 1998, <> (8 September 1998).

[22] CMC Ltd., About CMC Limited, 3 June 1998, <> (16 July 1998).

[23] Sadagopan, “Historical Perspective,” IT in India - A Status Report, 24 April 1998, < infotechtechdesk/art1a.htm> (18 June 1998). Of possible interest, the Industries Minister who instigated this move was George Fernandes, currently the Defense Minister. The Defense Ministry is one of only four ministries that are represented on the ministerial committee that is to examine the July 1998 Action Plan proposed by the National Task Force on Information Technology & Software Development.

[24] CMC Ltd., CMC Limited: A Review, undated company brochure acquired at the EDICON ’98 conference (New Delhi, 29 May 1998), p. 27.

[25] _____, Indonet, 16 January 1997, <> (16 July 1998).

[26] Very Small Aperture (satellite communications) Terminal

[27] Indian Institute of Technology, Bombay (Mumbai)

[28] Non-Government Organizations

[29] Kilo-bits (1,024) per second

[30] Professor S. Sadagopan, “Introduction,” IT in India - A Status Report , 24 April 1998, <> (18 June 1998).

[31] CMC Ltd., CMC Limited: A Review, op. cit.

[32] NIC, Service Profile (August 1994), pp. 2, 8-9.

[33] Personal communication, N. Vijayaditya (5 June 1998). Dr. Vijayaditya is the Deputy Director General of NIC.

[34] ibid., p. 8.

[35] Vijayaditya, op. cit.

[36] NIC, Service Profile, op. cit., pp. 25ff.

[37] ibid.

[38] ibid., pp. 10-11.

[39] ibid., pp. 14-15.

[40] Vijayaditya, op. cit.

[41] Reddy, op. cit.

[42] VSNL, “Gateway Packet Data Transmission,” VSNL Specialized Services, 28 January 1998, <> (20 July 1998).

[43] _____, “Gateway Electronic Mail Service (GEMS 400),” Business Network, 13 January 1998, <> (20 July 1998).

[44] _____, “Gateway Electronic Data Interchange System (GEDIS),” Electronic Data Interchange, 19 March 1998, <> (20 July 1998); Gateway Electronic Data Interchange System (GEDIS), company brochure (August 1997).

[45] _____, “Concert Packet Services,” 12 January 1998, <> (20 July 1998).

[46] “Global One and VSNL Announce National Data Carrier Agreement to Serve India Market,” Business Wire (25 March 1998).

[47] T. Mahabharat, “India’s DOT Permits New Category of Private Network,” Newsbytes (17 March 1998).

[48] “Status of Value Added Services,” Communications Today (November-December 1995), p. 28.

[49] ERNET, About the ERNET India, 19 June 1998, <> (14 July 1998).

[50] Personal communication, S. Ramani (8 June 1998). Dr. Ramani is the Director of NCST.

[51] Arun Mehta <>, “Ernet,” 30 July 1998, personal e-mail (30 July 1998).

[52] S.A. Kumar, “ERNET Satellite WAN,” Sambandh 1 (June 1998), <> (14 July 1998).

[53] Ramani, op. cit. This includes all users with full IP access from any public or special-purpose service provider.

[54] Madanmohan Rao, <> “200 ISPs May Sprout In India By Year 2000—Once the Green Signal Is Given,” 30 May 1998, <> (3 June 1998).

[55] Ramani, op. cit.

[56] Sources: Subscribers: Personal communication, P.D. Gupta (19 June 1998); 1992-1997 hosts/domains: Network Wizards, “Host Distribution by Top-Level Domain Name,” Internet Domain Survey, (month, year), <>; January 1998 hosts/domains: Network Wizards, “Distribution by Top-Level Domain Name,” Internet Domain Survey, January 1998, 6 February 1998, <>; July 1998 domains estimate: NCST, “Status on the number of Domains Registered Under .in Domain,” Indian Domain Registration Home Page, 1 August 1998, <> (22 August 1998) and MOSAIC Group zone transfer counts; July 1998 hosts/domains: Network Wizards, “Distribution by Top-Level Domain Name,” Internet Domain Survey, July 1998, 12 August 1998, <> (14 August 1998). As of August 1998, NCST indicated that 435 third-level domains had been registered under seven second-level categories (,,,,,, However, network research indicated that there were 98 third-level domains under the domain, a single host in the domain, and an undetermined number of domains/hosts under the domain, none of which were reflected on the NCST list.

[57] Located at 83ºE, INSAT-1D entered an inclined orbit in mid-1998, indicating that it is nearing the end of its operational life. Additionally, ERNET is down for several hours daily due to interference from unidentified carriers on ERNET’s assigned frequencies. Due to its low priority, ERNET continues to be relegated narrow bandwidths on aging satellites. This is the third satellite assigned to ERNET since the network’s inception.

[58] S.A. Kumar, “ERNET satellite WAN,” Sambandh 1 (June 1998), pp. 6-7.

[59] ERNET India, Topology, 2 July 1998, <> (24 July 1998).

[60] Ramani, op. cit.

[61] ERNET India, “ERNET Backbone Sites,” op. cit.

[62] _____, “ERNET India becomes member of Internet Society,” Sambandh 1 (June 1998), <> (14 July 1998).

[63] _____, VSAT Sites on ERNET, India, 31 July 1996, <> (7 February 1998).

[64] _____, “ERNET International Links to VSNL Gateway,” Topology, 4 May 1998, < topo.htm> (5 May 1998).

[65] Personal communication, S. Ramakrishnan (“Ramki”) (28 May 1998). Dr. Ramakrishnan was a Senior Director and Head of the Information Infrastructure Division of the DoE. Considered to be the founder of the ERNET, he is now the Executive Director of ERNET India.

[66] ERNET India, “ERNET India is born,” Sambandh 1 (April 1998), p. 1.

[67] ibid.