India’s domestic software industry is set for a historic transformation, with projections indicating a fivefold expansion to reach $100 billion by 2035. This remarkable growth trajectory, outlined in a new report by SaaSBoomi in collaboration with 1Lattice, was unveiled at the SaaSBoomi Annual 2025 event in Chennai.
The report attributes this surge to AI-led automation breakthroughs, cost-effective software development, the increasing adoption of software by small and medium businesses (SMBs), and the government’s accelerating digital initiatives. Currently valued at $20 billion, the Indian software market has grown sevenfold since 2015, primarily driven by digital adoption, formalization of the economy, and robust digital public infrastructure (DPI) efforts.
India’s Evolving Software Landscape
While global software players currently dominate about 75% of the Indian market, the next decade will witness the rise of homegrown software giants. The report underscores the need for Indian startups to pivot toward solutions tailored for the Indian market, ensuring a stronger product-market fit and a sharper focus on value-driven innovation.
Avinash Raghava, Founding Volunteer & CEO of SaaSBoomi, emphasized India’s pivotal moment: “The domestic market remains a largely untapped opportunity for Indian SaaS firms. The key to success will be developing localized solutions that not only serve India but also scale globally. AI and vertical SaaS will be instrumental in addressing unique Indian challenges.”
Echoing this sentiment, Gowri Shankar Nagarajan, Volunteer at SaaSBoomi and VC at Antler, stated, “India can no longer afford to remain a bystander in the global tech race. The $100 billion software opportunity is real and achievable, but it will require Indian firms to rethink their strategies, collaborate effectively, and prioritize sustainable growth.”
Key Market Drivers
The report identifies enterprise AI and cloud adoption as a primary catalyst, with expectations of contributing $35 billion in market expansion. BFSI, healthcare, and manufacturing sectors are leading the charge in AI-driven automation and cloud adoption, fueling software demand.
Additionally, the digital-native business segment is set to increase its software spending from $4.6 billion in 2025 to $26 billion by 2035. With deeper digital transformation efforts, these businesses will play a crucial role in accelerating market expansion.
SMBs and Cybersecurity: Emerging Growth Sectors
Vertical SaaS solutions catering to SMBs will unlock an estimated $13 billion opportunity. Unlike global players who have primarily focused on horizontal SaaS, Indian startups are developing industry-specific solutions that align with local regulatory and business requirements.
Cybersecurity is another major area of expansion, poised to grow sixfold from $1.6 billion in 2025 to $10 billion by 2035. With India’s digital footprint expanding, companies are investing heavily in compliance-driven security solutions and data protection frameworks. Regulatory policies such as the DPDP Act 2023 and RBI’s fintech security norms will further push this growth.
Government’s Role in Software Expansion
Government spending on software is projected to rise from $1.6 billion in 2025 to $8 billion by 2035, largely due to DPI initiatives and regulatory mandates. Increased software adoption in governance, digital public services, and national security will be key to achieving this growth.
Path to Creating 50+ Domestic Software Giants
The report outlines a ‘Winning Playbook for the Domestic Market,’ which advises software firms to focus on:
- Building for Bharat: Employing high-touch go-to-market (GTM) strategies to cater to India’s diverse business landscape.
- Expanding Product Offerings: Developing multi-product roadmaps to scale efficiently.
- Targeting Adjacent Markets: Leveraging India’s strengths to scale into Southeast Asia (SEA) and the Middle East & North Africa (MENA).
Currently, India has nurtured approximately ten domestic software firms of significant scale. However, with a strategic focus on innovation, capital efficiency, and market-driven solutions, the country has the potential to foster an additional 50–60 software giants in the coming decade.
The findings of this report reaffirm India’s growing influence in the global software ecosystem, signaling a new era where domestic players take center stage in defining the future of technology.
