India’s domestic software market is set for massive growth, with projections indicating a five-fold increase over the next decade to reach $100 billion by 2035, a new report said on Tuesday.
This growth will be driven by AI-led automation, cost-effective software development, increased adoption by small and medium businesses (SMBs), and expanding government digital initiatives, according to a report by SaaSBoomi and 1Lattice.
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The software market is currently valued at $20 billion in 2025.
The report highlights how India’s software market has grown seven times since 2015. However, nearly 75 per cent of the market is still dominated by global players.
To achieve the next phase of growth, Indian startups will need to develop homegrown solutions tailored to the country’s unique business and regulatory needs.
One of the biggest contributors to this expansion will be enterprise AI and cloud adoption, which is expected to add $35 billion to the market.
Notably, digital-first businesses are expected to increase their software spending significantly, from $4.6 billion in 2025 to $26 billion by 2035, it added.
SMBs will also play a crucial role in driving market growth, with vertical SaaS solutions unlocking a $13 billion opportunity.
Cybersecurity is another high-growth area, with market size expected to rise from $1.6 billion in 2025 to $10 billion by 2035.
As India’s digital economy expands, businesses are investing heavily in data security and compliance-driven solutions, especially to meet regulatory norms such as the DPDP Act 2023 and the RBI’s fintech security guidelines.
Government spending on software is also set to grow substantially, increasing from $1.6 billion in 2025 to $8 billion by 2035.
“The future of SaaS will belong to companies that master efficiency without sacrificing ambition,” said Amar Choudhary, CEO and Co-founder, 1Lattice.
“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,” added Avinash Raghava, CEO, SaaSBoomi.
