The present study to analyze the contribution of IT sector through its export to development of Indian economy. We examine the policy environment, arguing that Govt policy is better focused on improving the contribution of different sectors to India's economic development. Especially the contribution of IT sector (Service Sector) components to India's economic development Scenario and the development of infrastructure and employment and its contribution to India's GDP. It also provides information regarding the spillover effects of IT exports to India's external sector by broadening the IT Industry with production of Software and Hardware devices, Information Technology and Enabled Services and Denser Communication Network, and improving Governance. The Govt has a major role to play in expanding Computer education to rural and remote areas in the country. IT sector is one of the leading representative sectors among all the sectors of the economy. It is fastest growing sector definitely it will lead to rapid economic development of India.