Build an Indian Software Product and Innovation Economy

India is one of the world’s great software talent centers. Indian engineers build and maintain critical technology for companies worldwide, and India’s IT-services industry has created millions of skilled jobs and enormous export revenues.

But India’s software success has been disproportionately service-led rather than product-led. The Government of India’s own National Policy on Software Products identified this structural gap, describing India’s IT industry as predominantly services-led and calling for a transition toward a technology-oriented software-products industry built around innovation, intellectual property and higher value creation.

The distinction matters.

When an Indian technology-services company develops software for a multinational customer, India earns valuable service revenue and creates employment. But the customer may continue to own the product, intellectual property, brand, and long-term relationship with millions of users.

India has produced successful software-product companies, but it still lacks homegrown companies comparable in global scale and reach to Google, Microsoft, or Oracle, serving both its enormous domestic market and the world.

China followed a different trajectory. Alongside manufacturing and services, it developed large domestic technology ecosystems and companies offering Chinese alternatives across search, cloud, communications, e-commerce, enterprise technology and digital platforms. Its government procurement system today also purchases domestic operating systems, databases and other foundational software; for example, China’s 2026 central-government procurement includes framework procurements for both server operating systems and transactional database software.

India should aim to become not merely one of the best places in the world to write software, but one of the best places to invent, own and commercialize software products.

Design India’s software and innovation policies around creating Indian-owned products, intellectual property, platforms, and globally scalable technology companies, while continuing to support the country’s successful IT-services industry.

The objective should not be to replace services or discourage multinational companies from employing Indian engineers. Both remain valuable.
Instead, India should create a second, much stronger pathway:

Indian talent → Indian innovation → Indian-owned intellectual property → Indian product → Domestic scale → Global customers

Policy should remove the barriers that make it easier for talented engineers to work on somebody else’s product than to build their own.

This should include:

– stronger incentives for genuine software R&D and product development;
– easier commercialization of research developed in universities and public institutions;
– simpler rules for employee stock options and startup ownership;
– easier cross-border payments and international SaaS sales;
– better access to long-term growth capital;
– competitive funding for difficult foundational technologies;
– stronger links between universities, researchers, startups and established technology companies;
– government procurement opportunities for new Indian products; and
– support for Indian software companies entering international markets.

Government should not select which company becomes India’s Google or Oracle. Its role should be to create an ecosystem where thousands of companies can try to build globally competitive products, and the market determines which succeed.

Build for India’s Market First—and Then the World

India’s enormous domestic market should itself become an advantage.
Indian companies should be encouraged to solve difficult problems in banking, healthcare, manufacturing, logistics, education, agriculture, cybersecurity, government and enterprise technology.

A company that successfully serves millions of Indian consumers, businesses or government users has already demonstrated its technology at extraordinary scale.

The pathway should become:

Solve an Indian problem → Build a world-class product → Prove it at Indian scale → Own the intellectual property → Sell it globally → Reinvest in the next generation of innovation

China demonstrates how a large domestic market can help support the development of a domestic technology ecosystem.

China developed major homegrown technology companies and domestic alternatives across search, cloud computing, digital platforms, communications, and enterprise technology rather than depending entirely on Western technology companies.

Government policy was only one factor. China’s enormous market, entrepreneurship, engineering talent, investment and restrictions affecting some foreign competitors also played important roles. India should therefore not simply copy its model.

But one lesson is relevant: domestic demand can be used to help domestic technology companies reach scale.

China continues to use government procurement as part of this ecosystem. In 2026, central-government procurement frameworks included competitions for domestic server operating systems and transactional database software, while other government procurements specify compatibility with domestic CPUs, operating systems, databases, and middleware.

India already possesses many of the ingredients China had to develop: a huge domestic market, millions of technically skilled workers, globally experienced software companies, strong universities, entrepreneurs, digital public infrastructure and access to international customers.

The missing objective is to make ownership of technology and intellectual property a much larger part of India’s software success.

The transformation should be:

Software talent → Innovation → Product development → Indian intellectual property → Domestic scale → Global companies
India proved that its engineers can build some of the world’s most sophisticated software.
The next software revolution should ensure that more of the products they build are conceived, owned, and commercialized in India.