IXP means Internet Exchange Point. It is also known as a Network Access Point or NAP. An IXP is a physical point where different ISPs meet to exchange their data and hence different networks are connected together to form the Internet. IXPs are perhaps the most important part of the Internet, as without them the concept of global wide area networking would not be possible.
The first IXPs established were the Metropolitan Area Ethernet in Washington D.C., the Commercial Internet Exchange in Palo Alto, the Federal Internet Exchange in San Jose and the Hong Kong Internet Exchange at the Chinese University of Hong Kong.
There are 91 countries with 1 or more IXPs. However, 106 countries depend on others for data transfer and need to develop their own IXPs. The list of all the IXPs present in the world can be found here.
An IXP reduces an ISP's cost of data interchange to a great extent. If a region has its own IXP, the ISPs connecting to it do not have to pay anything. However, if IXPs are not present ISPs would have to pay third party networks to do the same job.
Due to the presence of an IXP, the network paths are increased therefore increasing the routing efficiency. It becomes easy for ISPs to connect to other ISPs across borders.
Furthermore, the speed of data transfer through an IXP is much higher due to the greater bandwidth. The absence of IXPs in under-developed regions creates a poor network and the quality of data transfer is not so good.