Indian Domestic Software Market Projected to Reach $100 Billion by 2035: Report

India's indigenous software industry is set to experience a major sea change, with estimates predicting five times growth within the next ten years, going up to a valuation of $100 billion in 2035, a report published on Tuesday stated.

Driven by AI automation, low-cost software development, growing SMBs adoption, and widening government digitization programs, this unprecedented boom will take shape, according to SaaSBoomi and 1Lattice findings.

India's software industry today is worth $20 billion in 2025, having grown sevenfold from 2015. Yet, most of the industry—around 75%—remains dominated by foreign firms.

In order for Indian startups to propel the next growth wave, the report emphasizes building homegrown solutions that are adapted to the business environment and regulatory needs of the country.

One of the critical drivers of this high-speed growth will be enterprise cloud and AI adoption, which is expected to contribute $35 billion to the software industry.

The research also points toward growing software spending by digital-native companies, which is anticipated to rise from $4.6 billion in 2025 to $26 billion in 2035. Also, SMBs will be instrumental, with vertical SaaS solutions opening up a $13 billion market opportunity.

Another growth-intensive area is cybersecurity, for which demand is projected to increase from $1.6 billion in 2025 to $10 billion in 2035. With the growth of India's digital economy, companies are focusing on data security and compliance-software driven to ensure alignment with major regulations like DPDP Act 2023 and RBI fintech security regulations.

Government spending on software will also see a significant increase, rising from $1.6 billion in 2025 to $8 billion by 2035.

Observing this revolutionary change, Amar Choudhary, 1Lattice CEO and Co-founder, noted: "The future of SaaS will belong to companies that master efficiency without sacrificing ambition."

Avinash Raghava, founder of SaaSBoomi, had this to say: "India's software industry has historically been led by global companies, but we are coming to a tipping point. The local market has enormous potential that is still untapped."