Being a late-developing country, India, regardless of her backward infrastructure, has been eager for success through offshore manufacturing in software industry. However, is she able to manage to keep playing her crucial role in the world economy system while facing the competition against other coming late-developing countries? Outsourcing manufacturing and mass production do allow developing countries in the beginning stage enjoy a rich harvest. But to remain their competitiveness, would it be essential for developing countries to undergo the transformation? India still seems to be a semi-peripheral country despite her nearly unparalleled software industry. India remains furthermore being regarded as a segment of the production chain without commanding the key technology along with marketing channel. This article will mainly investigate if the state is capable of dominating the industry development in order to lead the developing country to become a developed one under the circumstances of globalization of the knowledge economy. And if yes, to which extent? An attempt has been made to integrate the world-system theory and dependency theory to examine the thread of the software industry in India through hierarchy analysis on the dependent economy structure.