Indian domestic software market to hit $100 bn by 2035: Report

Recording a remarkable 5X growth in the next decade, India’s domestic software market is poised to hit $100 billion by 2035, according to a recent report by SaaSBoomi — India’s leading SaaS community – brought in collaboration with 1Lattice. The surge will be driven by AI-led discontinuities in automation, cost-effective software development, expanding SMB adoption, and deepening government digital initiatives.

The report highlights that India’s software market is currently valued at $20 billion in 2025, having grown 7X since 2015. This expansion has been fuelled by a surge in digital adoption, government-backed digital public infrastructure (DPI), and the formalization of the economy. With nearly 75% of the current market dominated by global players, the next decade will require a radically different playbook—one where Indian startups build India-oriented solutions that demonstrate stronger product-market fit and value-driven innovation.

Speaking about this, Avinash Raghava, Founding Volunteer & CEO, SaaSBoomi, said, “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.”

Adding further, Gowri Shankar Nagarajan, Volunteer at SaaSBoomi and VC at Antler, said, “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.”

Amar Choudhary, CEO and Co-founder, 1Lattice, said, “The future of SaaS will belong to companies that master efficiency without sacrificing ambition. Investors today are looking for capital-efficient businesses with strong fundamentals. Indian SaaS firms have the potential to deliver on this, provided they focus on strategic expansion, sustainable growth, and continuous product reinvention.”

One of the key insights from the report is the growing enterprise AI and cloud adoption, which is expected to contribute $35 billion in market expansion. Companies across BFSI, healthcare, and manufacturing are investing in AI-powered automation and cloud-based efficiencies, pushing software demand across sectors. Meanwhile, digital-native businesses will increase their software spend from $4.6 billion in 2025 to $26 billion by 2035, as they build deeper digital capabilities.

SMBs represent another major driver of growth, as vertical SaaS solutions are set to unlock a $13 billion opportunity. While global SaaS players have traditionally dominated the horizontal software market, India’s growing startup ecosystem is building industry-specific solutions that cater to local regulatory and business requirements.

The cybersecurity market is a critical area of expansion, expected to grow 6X from $1.6 billion in 2025 to $10 billion by 2035. With India’s digital economy expanding rapidly, companies are investing heavily in compliance-driven security solutions, data protection frameworks, and automation tools to meet regulatory requirements such as the DPDP Act 2023 and RBI’s fintech security norms.

The government, too, is expected to ramp up software adoption, increasing its software spend from $1.6 billion in 2025 to $8 billion by 2035, largely due to DPI initiatives and compliance mandates.

The report also lays out a ‘Winning Playbook for the Domestic Market’, urging software firms to focus on building for Bharat using high-touch GTM strategies, designing multi-product roadmaps, and targeting adjacent markets like Southeast Asia (SEA) and MENA to scale with the same core value proposition.

So far, India has produced about ten domestic software companies of scale. This report highlights that by encouraging innovation, addressing critical gaps, and improving capital efficiency, India has the potential to create another 50–60 software giants in the next decade.