ABSTRACT
This chapter explains the rise of two visible sectors in India: the auto industry mainly the passenger car segment and the information technology (IT) industry mainly software services. These are very different sectors, with different histories and policy environments. Both sectors show gradual institutional change, that is, a re-specification of statebusiness relationships and market-based responses to new opportunities. The chapter shows how these industries, characterized by specific initial conditions and industry logics, have evolved into dynamic sectors. It develops a simple framework to capture industrial dynamism leading to internationalization and identifies the key initial conditions of the case industries that set the stage for their expansion when the policy environment underwent radical change. The chapter analyzes the industry logics, such as markets, industry structures, and dominant business models adopted by these sectors. It presents a brief discussion of the internationalization of these sectors in terms of foreign direct investment (FDI), outsourcing arrangements, and diasporas.
