Telecommunications Reform and the Emerging ‘New-Economy’: The Case of India

Telecommunications reform in recent years in almost all developed and developing nations created an opportunity to attract foreign direct investment. The investments have been taking place mainly in the emerging ‘new’ economy sector. The main drivers of this sector are the information technology (knowledge-based) and the liberalisation and reform in telecommunications. Among the developing nations, the Indian economy faired better in attracting foreign direct investment in this sector due to the economic reform measures continued since 1991. In this paper, first, the economic and the regulatory reforms brought into the telecommunications sector of India have been addressed. Second, the emergence of the ‘new-economy’ and its contribution to growth has been investigated. Finally, the challenges for the Indian economy in managing the newly emerged economic opportunities have been discussed.