Founder Editor Team
Zoho Corporation founder and CEO Sridhar Vembu has sparked fresh debate in India’s tech ecosystem by sharply criticizing the country’s IT services industry, claiming it has created a financial bubble that “sucked all the oxygen” out of the broader economy. The outspoken entrepreneur, known for his strong views on self-reliance and rural innovation, made the remarks during a recent public interaction, drawing attention to the long-term consequences of over-reliance on software exports.
India’s IT Boom: A Double-Edged Sword?
While India’s IT industry has contributed significantly to GDP growth, employment, and global positioning, Vembu argues that its rapid expansion came at a cost. According to him, the outsourcing-driven IT services model diverted talent, capital, and policy focus away from core industrial sectors like manufacturing, deep tech, and product innovation.
“The IT industry created a financial bubble that sucked all the oxygen out of the economy,” Vembu said, emphasizing that excessive dependence on software exports led to economic distortion.
Financial Bubble and Talent Drain
Vembu believes that India’s IT success has inadvertently created a “talent drain” within the country itself. With top engineering talent funneled into high-paying IT service jobs, other critical sectors—including hardware, core engineering, scientific R&D, and agriculture tech—have suffered from underinvestment and lack of innovation.
He also criticized the industry’s role in fueling inflated valuations, real estate booms in tech hubs, and excessive capital flow into services that offer little to no long-term strategic value for the nation.
Call for Balanced Economic Growth
The Zoho founder reiterated his long-standing advocacy for balanced, decentralized, and inclusive economic growth. He emphasized the need to invest in rural innovation, domestic manufacturing, and indigenous product development.
Vembu, who has famously moved Zoho’s R&D operations to rural Tamil Nadu, believes that building long-term economic resilience requires shifting from service-based dependency to a “product-first” mindset—one that encourages deep tech startups, IP creation, and value-added exports.
Not Anti-IT, But Pro-Diversification
Despite his sharp remarks, Vembu clarified that he is not anti-IT. Instead, he is calling for greater diversification in India’s economic priorities.
“It’s not about rejecting IT, but recognizing that we have overemphasized it at the expense of other sectors,” he noted.
His comments echo broader concerns among economists and policymakers that India must move beyond the “IT services powerhouse” image and nurture sectors that can generate sustainable employment, resilience, and technological self-sufficiency.
A Wake-Up Call for India’s Tech Ecosystem?
Sridhar Vembu’s remarks come at a time when India is aiming to become a $5 trillion economy and boost its Make in India and Digital India initiatives. His comments serve as a timely reminder that while the IT sector remains a strong pillar, the country needs a more diversified economic foundation to truly compete on the global stage.
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