Use Government and Defence Procurement to Build Domestic Software Products

The Indian government and defence establishment are among the country’s largest technology buyers. They require databases, operating systems, cloud infrastructure, cybersecurity, communications, geospatial systems, enterprise software, artificial intelligence, logistics platforms, and thousands of specialized applications.

When these needs are met largely by purchasing established products or commissioning one-off custom software, government spending solves an immediate requirement—but does not necessarily create a reusable Indian software product that can subsequently be sold to thousands of other customers.

This creates a missed opportunity.

Government and defence technology spending can do more than digitize government. It can become a launching customer for Indian innovation, particularly in strategic technologies where domestic capability, cybersecurity and technological independence matter.

The objective should not be to exclude every foreign technology. It should be to ensure that India’s enormous public-sector technology demand also helps create Indian products, intellectual property, and globally competitive software companies.

Create a Domestic Software Innovation Procurement Programme for government and defence.

For selected strategic technology requirements, government should sometimes procure a problem to be solved rather than specify an existing commercial product.

For example, government might require a secure database that can support a defined transaction volume, a cybersecurity platform that can detect specified threats, or a logistics system that meets particular operational requirements.

Indian companies, startups, universities, and technology consortia could compete to develop solutions.

The process should be:

Government defines the problem → Multiple companies develop competing solutions → Independent technical testing → Best products receive initial contracts → Government becomes the first major customer → Products improve at scale → Companies sell commercially in India and globally

Government should not permanently own all commercial rights to successful products merely because it was the first customer. Where national-security requirements permit, companies should be able to retain or license appropriate intellectual property and commercialize the underlying technology for other customers.

Build Domestic Capability in Strategic Software

The programme should initially concentrate on technologies where government demand is large and strategic dependence matters, including:

– operating systems and secure computing environments;
– databases and data infrastructure;
– cloud and distributed-computing platforms;
– cybersecurity;
– AI platforms and tools;
– defence command, control and mission software;
– secure communications;
– geospatial and satellite software;
– logistics and supply-chain systems;
– enterprise software; and
– productivity and collaboration software.

Domestic preference should not become permanent protection for inferior products.

Indian products should have to meet demanding standards for performance, cybersecurity, interoperability, reliability, and cost. Government can provide the first opportunity, but companies should ultimately have to compete.

Use Open Source Where Building Everything From Scratch Makes No Sense

Domestic technological capability does not mean that every line of software must be written in India.

Much of the world’s digital infrastructure already depends on global open-source technologies such as Linux. Open-source software gives countries and companies access to source code they can inspect, modify, secure, and build on without depending entirely on a single proprietary vendor.

India should therefore use two complementary approaches:
Develop Indian proprietary products where ownership creates strategic or commercial value.

Build Indian capabilities and products on global open-source technologies where reinventing the underlying technology would waste resources.

Software developed with public money should also be released as reusable open source where security, privacy, and commercial considerations permit, allowing one government agency to build on what another has already paid to develop.

Other major economies increasingly treat government software procurement as part of their broader technology strategy.

China has deliberately encouraged domestic software in government procurement. China’s official government-procurement guidance identifies domestic alternatives across operating systems, databases, middleware, cloud platforms, security software, and applications, explicitly connecting domestic software with technological autonomy and information security.

This is no longer theoretical. In 2026, China’s central government conducted a framework procurement for transactional database software in which 19 suppliers competed, demonstrating the emergence of a domestic supplier ecosystem in a category historically dominated by a small number of foreign companies.

Europe is pursuing a different model built substantially around open source. The European Commission has used Linux and other open-source technologies for years and adopted a strategy that explicitly links open source to digital autonomy, innovation, interoperability, and reduced dependence on individual vendors.

In 2026, the European Commission went further, adopting a new Open Source Strategy aimed at strengthening Europe’s technological sovereignty. It promotes reusable and interoperable software across public administrations, supports open-source alternatives in priority areas, and encourages governments to reuse software they have already developed or purchased.

These approaches differ—China has placed greater emphasis on domestic products, while Europe has emphasized open standards, open source and technological sovereignty—but they demonstrate the same strategic principle:

Government does not have to be merely a consumer of technology. Its purchasing power can help create technology ecosystems.
India has an additional advantage: it already possesses one of the world’s largest pools of software engineers and a sophisticated technology industry.

The opportunity is to connect that talent with one of the world’s largest potential technology customers—the Indian government itself.

Government need → Indian innovation → Competitive product → Government as first customer → Proven at national scale → Private-sector adoption → Global market

Instead of spending billions merely buying software, India should use a portion of that spending to help build the software companies and technologies it wants to have twenty years from now.