Motivation & Overview

India’s services sector is internationally renowned and has helped propel the country’s economic growth. Indeed, in recent years, a majority of the value added to India’s GDP has been concentrated in services. Especially noteworthy are India’s software and computing services, which include large multinational conglomerates like Infosys and Tata Communications Services. 

Yet as Indian software has flourished, the growth of its computer hardware and manufacturing has been sluggish. Tellingly, India is still a net importer of hardware and other electronics. At first glance, this divergence is puzzling because both the software and hardware sectors should have benefited from India’s educated labor pool and infrastructure. How can these different sectoral outcomes be explained?
 

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Fig. 1: Electronics production value compared to software and software service revenues.
 

In “Comparing Advantages in India’s Computer Hardware and Software Sectors,” Dinsha Mistree and Rehana Mohammed offer an explanation in terms of state capacity to meet the different functional needs of each sector. Their account of India’s computing history emphasizes the inability of various state ministries and agencies to agree on policies that would benefit the hardware sector, such as tariffs. Meanwhile, cumbersome rulemaking procedures inherited from British colonialism impeded the state’s flexibility. Although this disadvantaged India’s hardware sector, its software sector needed comparatively less from the state, building instead on international networks and the efforts of individual agencies.

The authors provide a historically and theoretically rich account of the political forces shaping India’s economic rise. The paper not only compares distinct moments in Indian history but also draws parallels with other landmark cases, like South Korea’s 1980s industrial surge. Such a sector-based analysis could be fruitfully applied to understand why different industries succeed or lag in emerging economies. 

Different Sectors, Different Needs

In order to become competitive — both domestically and (especially) internationally — hardware manufacturers often need much from the state, what the authors call a “produce and protect regime.” This can include the construction of factories and the formation of state-owned industries (SOEs), as well as tariffs to reduce competition or labor laws that restrict union strikes. Perhaps most importantly, manufacturers need a state whose legislators and bureaucrats can coordinate with each other in response to market challenges. Such a regime is incompatible with excessive “red tape” or with the “capture” of regulators by narrow interest groups. Because customers tend to view manufactured goods as “substitutable” with each other, firms will face intense competition as regards price and quality.
 

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Fig. 2: Inter-agency coordination required for sectoral success.
 

The situation is very different for service providers, whose success depends on building strong relationships with customers. States are not essential to this process, even if their promotional efforts can be helpful. Coordination across government agencies is similarly less important, as just one agency could provide tax breaks or host promotional events that benefit service providers. Compared with manufacturing, customers tend to view services as less substitutable — they are more intangible and customizable, which renders competition less fierce. Understanding India’s computing history reveals that the state’s inability to meet hardware manufacturers’ needs severely constrained the sector’s growth. 

The History of Indian Computing

Although India inherited a convoluted bureaucracy from the British Raj, the future of its computing industry in the 1960s seemed promising: political elites in New Delhi supported a produce-and-protect regime, relevant agencies and SOEs were created, and foreign computing firms like IBM successfully operated in the country. 

Yet by the 1970s, some bureaucrats and union leaders feared that automation would threaten the federal government’s functioning and India’s employment levels, respectively. Strict controls in both the public and private sectors were thus adopted, for example, requiring trade unions — which took a strong anti-computer stance — to approve the introduction of computers in specific industries. The authors make special mention of India’s semiconductor industry. It arguably failed to develop due to lackluster government investment, the need for manufacturers to obtain multiple permits across agencies, decision makers ignoring recommendations from specialized panels, and so on.

Meanwhile, implementing protectionist policies proved challenging. For example, decisions to allow the importation of previously banned components required permission from multiple ministries and agencies. After India’s 1970s balance-of-payments crisis, international companies deemed inessential were forced to dilute their equity to 40% and take on an Indian partner. IBM then left the Indian market. At the same time, SOEs faced growing competition over government contracts and workers, owing to the growth of state-level SOEs.

The mid-1980s represented a partial turning point as Rajiv Gandhi became Prime Minister and liberalized the computing industry. Within weeks, Rajiv introduced a host of new policies and shifted the government’s focus from supporting public sector production to promoting private firms, which would no longer face manufacturing limits and would be eligible for duty exemptions. Changes to tariff rates and import limits would not require approval from multiple agencies. Meanwhile, international firms reengaged with Indian markets via the building of satellite links, facilitating cross-continental work, such as between Citibank employees in Mumbai and Santa Cruz.

However, this liberalizing period was undermined and partially reversed after 1989, when Rajiv’s Congress Party (INC) lost its legislative majority and public policy became considerably more fragmented. Anti-computerization forces, especially the powerful Indian trade unions, worked to stymie Rajiv’s reforms. Pro-market reformists were forced out of their positions in Indian bureaucracies. Rajiv was assassinated in 1991, after which Congress formed a minority government with computer advocate P. V. Narasimha Rao as PM. Yet all of this occurred at a delicate time, as India was at risk of defaulting and had almost completely exhausted its foreign exchange.

By the late 1990s, both the hardware and software sectors should have benefited from the rising global demand for computers, yet India’s history of poor state coordination hindered manufacturers. Meanwhile, software firms were able to take advantage of global opportunities given their comparatively limited needs from state actors and political networks — for example, helping European Union banks change their computer systems to Euros. Ultimately, the Indian state has powerfully shaped the fortunes of these different sectors.

*Research-in-Brief prepared by Adam Fefer.

We are pleased to share the publication of a new volume, Cold War Refugees: Connected Histories of Displacement and Migration across Postcolonial Asia, edited by the Korea Program's Yumi Moon, associate professor in Stanford's Department of History.

The book, now available from Stanford University Press, revisits Cold War history by examining the identities, cultures, and agendas of the many refugees forced to flee their homes across East, Southeast, and South Asia due to the great power conflict between the US and the USSR. Moon's book draws on multilingual archival sources and presents these displaced peoples as historical actors in their own right, not mere subjects of government actions. Exploring the local, regional, and global contexts of displacement through five cases —Taiwan, Vietnam, Korea, Afghanistan, and Pakistan — this volume sheds new light on understudied aspects of Cold War history.

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Jessie Kong: Every year, SJEC puts on a week-long, entirely student-run, exchange program for 20-25 visiting Japanese students from Keio, Doshisha, and Kyoto Universities. Through this programming, we strive to provide authentic insights into Stanford academics, extracurriculars, and lifestyle by having the Japanese students join our lives and develop bonding experiences. 

As one of the co-presidents of SJEC this year, my work has centered around coordinating the entire team of Stanford officers, delegating tasks between teams, communicating with and preparing the Japanese students, and facilitating activities during the conference.

Through leading SJEC this year, I have realized the importance of dedication and commitment when planning these activities. My previous years in SJEC leading the social team has also shown me how to plan events from start to finish in an efficient way that leverages the capabilities of everyone on the team while focusing on the experience for the Japanese students. I think being able to put the group's interest above my own was also a good skill I learned while in the co-president position.

Socially, I have been able to build connections both for myself and other Stanford students with the Japanese student community. Starting with SJEC, I was able to meet and take care of visiting Japanese students at Stanford, and this effort was reciprocated when I went to study abroad through the BOSP Kyoto program. Being able to feel the reciprocity of my efforts in SJEC only makes me more motivated to continue working in SJEC to create a good experience for more Japanese students who visit in the future.
 

Yifei Cheng: The main event from our organization this year is the FACES annual summit that took place in January 2025. We invited 40 college students from Chinese and American universities to engage in dialogue about US-China relations on Stanford campus. As the president of FACES, I was involved in candidate selection and planning the summit schedule. I also took the initiative to organize the summit field trip at the Angel Island Immigration Facility. 

Through the lecture of Professor Gordon H. Chang on the persecution of Chinese scientists during the McCarthy Era, I learned about the repeated interlocks between politics and academia in the US, which has significant contemporary repercussions with the current administration's restrictions of student visas and immigration process. 

The FACES summit also enhanced my understanding of diplomacy on a personal level. This experience taught me that cultural exchange isn’t about reaching agreement—it’s about creating a shared space where different truths can coexist. I learned to listen across differences, become comfortable with discomfort, and see the value in ambiguity. These lessons have reshaped how I engage in conversations not only about geopolitics, but also about identity, equity, and belonging more broadly.

I gained concrete organizational skills with managing timelines, delegating tasks, and staying calm when things went wrong—like when the hotel rooming list gets wrong and messy. I also learned that leadership is less about control and more about creating the conditions for others to grow. I facilitated the daily reflection session during the summit. As the discussion facilitator, I found it rewarding to moderate discussions where sometimes disagreements arise. I think this is a valuable skill for my academic and professional development. 
 

Aimen Ejaz and Luv Jawahrani: This year, in its inaugural term, the Stanford Indo-Pak Dosti Forum (SIPDF)achieved what many said was impossible: bringing together Indians and Pakistanis in the same room – voluntarily – twice a week.

In the fall, we launched INTNL REL 47SI: Bridging the Divide, a student-initiated course focused on the political and economic dimensions of India-Pakistan relations. The class brought together prominent individuals concerned about peace-building, ranging from former Indian and Pakistani ambassadors who’d been involved in negotiating peace to professors from the Stanford Graduate School of Business (GSB), to research fellows at the Hoover Institute and the Center for International Security and Cooperation (CISAC), and veteran journalists who have covered the subcontinent for decades.

In spring, we co-taught GLOBAL 47SI: Building Bridges—a course that spotlights cross-border entrepreneurship as a tool for soft diplomacy. We invited legendary South Asian entrepreneurs and venture capitalists from both sides of the border: Mamoon Hamid (Managing Director at Kleiner Perkins), Samir Kaul (Managing Director at Khosla Ventures), Amit Patel (Managing Director at Owl Ventures), Bilal Zuberi (Partner at Lux Capital), and Anand Swaminathan (Senior Partner at McKinsey), among others. The goal? To explore how venture-building, innovation, and chai-fueled resilience can outpace political gridlock.

Academically, co-leading our student-led initiative taught us more than any textbook ever could, mostly because we had to build the syllabus ourselves. And we didn’t just co-lead — we co-dreamed and co-hustled, getting the syllabi approved by multiple departments and cold-emailing, even chasing down, speakers from across the U.S.

In designing INTNL REL 47SI: Bridging the Divide, we dove headfirst into the complexities of India-Pakistan political and economic relations. But we didn’t stop at reading IR theory. We debated it with the very diplomats and policymakers who once shaped those theories in real time. Every week became a crash course in postcolonial statecraft, regional security, and the surprisingly human side of high diplomacy.

Then came GLOBAL 47SI: Building Bridges, where we shifted from conflict to collaboration, exploring how entrepreneurship can serve as a tool of soft power. Through case studies, guest lectures, and our own classroom debates, we began asking whether a startup pitch can accomplish  what politicians can't. What happens when innovation moves faster than diplomacy? And what does it mean when the biggest South Asian venture capitalist in the world funds a startup founded by someone from the "other" side?

More than anything, we learned how to turn theory into action. Whether it was teaching concepts like diaspora diplomacy or moderating discussions between venture capitalists and undergrads, we were constantly translating complex ideas into real-world conversations. We didn’t just learn. We taught, we built, and we questioned everything along the way.

Culturally and socially, our student-led initiative felt less like organizing a class and more like hosting weekly peace talks, with chai and biryani. We came in thinking we were building a curriculum; we ended up navigating generations of silence, suspicion, and identity.

We learned that Partition isn’t just a historical event–it’s a living memory passed down through stories and subconscious hesitation. It’s in the way some students avoid eye contact when the topic turns political, or how others lower their voices when mentioning where their family is really from. But we also learned that these barriers can soften when people feel safe enough to speak, and laugh, together.

We watched students from India and Pakistan, often meeting for the first time, begin to open up. Conversations that started stiffly turned into long debates, jokes, shared Desi Spotify playlists, and sometimes even plans to visit each other’s cities, if our countries ever allow it. We learned that vulnerability—especially in a region taught to fear it—is a radical act. And that our generation is more ready than we think to rewrite the script we inherited.

There were moments when we questioned whether this initiative was worth it. When we received backlash online for platforming certain voices. When a class discussion got tense and uncomfortable. When friends warned us that this was “too political,” “too idealistic,” “too risky.” And we didn’t always have the perfect response.

But leadership, we realized, isn’t about always being right. It’s about being rooted in a vision that peace isn’t naïve — it’s necessary. That bridging divides isn’t weakness—it’s the only strength that can outlast hate. And when things fell apart — when a high-profile speaker pulled out at the last minute, or a student pushed back hard in class — we didn’t pivot away from our mission. We dug deeper. We turned cancellations into teachable moments. We turned criticism into conversation. Most importantly, we learned to trust ourselves and to trust that our generation doesn’t have to inherit the silence, the suspicion, and the separation.