ABSTRACT
India's information technology (IT) industry consists of three major components, they are; IT hardware, IT software and IT enabled services (ITeS) including outsourcing. The incidences of cyber crimes within its jurisdiction has grave political implications for the doubts that it raises in minds of Western companies intending to outsource business to India. This chapter examines the role of state in regulating outsourcing sectors in India. Given that the IT and ITeS sectors are crucial to development of knowledge based industries (KBIs) in India, the state and key organisations such as NASSCOM have a keen interest in expanding these sectors. Furthermore, with greater economic integration through linkages made by free trade agreements (FTAs) the KBIs are likely to be a key component of trade negotiations. Indian BPO companies are at a higher level of regulation than mandated by Indian regulations. The 70 per cent of the BPO companies surveyed felt that the key threats to data security were internal by nature.
