India's Domestic Software Market to Grow Fivefold, Hitting $100 Billion by 2035 Despite India producing only about ten large-scale domestic software companies so far, the report suggests that with sustained innovation, capital efficiency, and strategic scaling, the country has the potential to nurture another 50–60 software giants over the next decade.
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India's domestic software market is on the brink of a transformative decade, with projections indicating a fivefold growth to reach $100 billion by 2035. According to a report released by SaaSBoomi, one of India's leading SaaS communities, in collaboration with research firm 1Lattice, this surge will be driven by AI-led automation, cost-effective software development, increased SMB adoption, and government-backed digital initiatives.
Unveiled at the SaaSBoomi Annual 2025 in Chennai, the report underscores the rapid evolution of India's software landscape. Currently valued at $20 billion, the sector has already expanded sevenfold since 2015, fueled by the rise of digital adoption, digital public infrastructure (DPI), and economic formalization. However, with nearly 75 per cent of the market still dominated by global players, Indian software firms must chart a different course to capitalize on this massive opportunity.
Avinash Raghava, founding volunteer & CEO of SaaSBoomi, emphasized the significance of this turning point. "India's software ecosystem has long been overshadowed by global players, but we are now at a tipping point. The opportunity in our domestic market is vast and untapped. For Indian SaaS firms, success will depend on their ability to build localized solutions that scale globally, leveraging AI and vertical SaaS to tackle challenges that are uniquely Indian. The next decade will be defined by the ability of Indian companies to address these gaps," he said.
Gowri Shankar Nagarajan, volunteer at SaaSBoomi and VC at Antler, echoed this sentiment, stating, "We are entering a phase where India can no longer afford to be a bystander in the global tech race. To seize the $100 billion opportunity ahead, India's domestic software firms must redefine their approach: reorienting strategies, collaborating more effectively, and focusing on long-term, sustainable growth. The ambition to capture 50% of this market is not just an aspiration, but a real, achievable goal for those who can innovate and adapt to India's unique digital landscape."
The report points to enterprise AI and cloud adoption as major catalysts for growth, with these technologies expected to contribute $35 billion in market expansion. Sectors such as BFSI, healthcare, and manufacturing are leading investments in AI-powered automation and cloud-based efficiencies, accelerating software demand across industries. Digital-native businesses are also ramping up their software spending, projected to rise from $4.6 billion in 2025 to $26 billion by 2035 as they deepen their digital capabilities.
SMBs represent another critical growth driver, with vertical SaaS solutions set to unlock a $13 billion market. While global SaaS firms have traditionally dominated horizontal software markets, Indian startups are carving a niche by creating industry-specific solutions tailored to local regulations and business needs.
Cybersecurity is another sector poised for exponential expansion, with the market expected to grow sixfold from $1.6 billion in 2025 to $10 billion by 2035. With the rapid growth of India's digital economy, companies are ramping up investments in security solutions, data protection frameworks, and automation tools to comply with regulations such as the DPDP Act 2023 and RBI's fintech security guidelines.
Government-led digital adoption is also expected to rise significantly, with software spending projected to increase from $1.6 billion in 2025 to $8 billion by 2035. This surge will be largely driven by DPI initiatives and compliance mandates, further fueling demand for locally developed software solutions.
The report outlines a strategic 'Winning Playbook for the Domestic Market,' urging software firms to focus on building for Bharat using high-touch go-to-market strategies, designing multi-product roadmaps, and expanding into adjacent markets like Southeast Asia (SEA) and MENA to maximize their core value proposition.
