MIETY fast-tracks work on funds for India's software products infrastructure,
The Indian Government approved the National Policy on Software Products on 28th
February 2019. The policy is aimed at the formulation of several schemes,
programs, and initiatives to foster the development and growth of the software
product industry. The agenda of the policy if to give an impetus to the IT
industry in the country in times of dynamic technological advancements
Salient Features of the policy
Why was the policy introduced?
- According to NASSCOM (National Association of Software and Service
Companies), The Information Technology and Information Technology enabled
services i.e. the IT-ITES industry presently contributes 8% to the Indian GDP,
post-implementation of this policy it is estimated contribute 10% by the year
- The policy looks forward to fostering India's Digital footprint and
giving momentum to the Digital Transformation movement in the country.
- The policy is determined to support 10,000 technology start-ups in the
software product industry which will supposedly generate employment
opportunities for 3.5 million people by 2025.
- It aims to form a "Talent Pool" in the software product industry by upskilling the workforce and motivating students from schools and colleges. It
has also formed a national "Talent Accelerator" which will target an approximate
of 100,000 young talent to take up IT as a profession and contribute to the
- It aims to line up 20 sectors restricted strategically located clusters
for the software product industry's growth and aims to have the desired
trade environment for Indian Software Product by the creation of an "Indian
Software Product Registry"
- This policy has devised a "Software Product Development Fund" (SPDF)
wherein INR 1000 crores would be utilized for a venture fund that would give
financial assistance for the start-ups.
- To further encourage Research and Innovation a sum of INR 500 crore is
directed to the government, industry, and academia for developing
state-of-the-art software products infusing Intellectual Property and IT in the
form of "Grant-in-aid"
- To ease the regulatory and legal issues a "Single Window Clearance"
system will be established.
- It will additionally include, "Model HS Code" which will help in the
classification of the Indian software products.
- The policy has laid special emphasis on the integration of the
technology start-ups in Government e-marketplace (GeM) and International trade.
- To achieve the desired implementation of the policy within the country a
"National Software Product Mission" (NSPM) would be established in MeitY with
the collaboration of Government, Academia, and Industry.
Narayan Murthy the co-founder of Infosys in an interview said:
"There has not
been a single invention from India in the last 60 years that became a household
name globally, nor any idea that led to the earth-shaking invention to delight
India is a powerful global leader in IT-related assistance. Indian economy is
known for its software outsourcing. Before the implementation of the NPSP
policy, there was no clear distinction between the IT services and Software
Products. The Global Software Product industry in 2017-18 was of the size 413
billion USD with India's share in exports being a mere 2.3 billion USD and
imports being 10 billion USD.
To keep up with the global technology trends such as Artificial Intelligence,
Blockchain, Machine Learning, Internet of Things, etc. it had become vital for
the government to productize the IT sector to save the industry from disrupting.
India has been facing a wide range of issues in healthcare, education and
agricultural sector an impetus to the software product industry would, in turn,
help the nation not only in job creation but also provide better facilities to
its citizens and from being a software product importer shift the paradigm to
being a software product exporter in future.
Legal Provisions and Developments around the policy
NPSP, 2019 gives India a basic outline for formulating new initiatives, programs
and other required facilities for the growth of software products sector in
The Global Start-up Report ecosystem, 2019 ranked Bangalore at 18th rank with
Silicon Valley being first on the list. The government of India is looking
forward to establishing additional IIT's and NIT's as these premier institutions
have the nation's best of the educational facilities. Every year millions of
engineers graduate from India who takes up careers in digital technology. This
would ensure that there is no shortage of skilled professionals.
The IT industry has empowered women as the sector consists of 30% of the female
workforce, it has not only attempted to bridge the gender gap considerably but
has also made it evident that women can have a successful career in the IT
India has established the Technology Incubation and Development of Entrepreneurs
(TIDE) where academia, research centres, and the government would support
software products developed in the country.
The India Stack Model is said to expand in all the sectors so that there is the
presence of technology in the workforce. The policy is currently at an infant
stage and is still making its way to create global technology players.
Probable way forward
India should focus on the skill development of the IT professionals as it would
be one core for the development of the industry. It is popularly said that
today’s saving is earning for tomorrow similarly capital used in the upskilling
of professionals would benefit the country in the near future.
India should also pay closer attention to the collaboration and integration of
several industries to promote efficiency, productivity, and novel innovations.
It should primarily provide the start-ups and the research centres with a good
legal and financial infrastructure for them to accelerate at the desired speed.
There should be a minimum entry barrier to entry in the industry and the
interventions should be transparent to avoid legal issues.
Software products are fundamental to India's Digital Transformation movement
encompassing societal change. Presently the nation's healthcare and education
sector are struggling with issues of accessibility, affordability, and quality
which is central for the country's development.
To provide universal access to education and healthcare facilities it will be
crucial for the IT industry and the technology start-ups to bring in innovation
in these sectors with the help of its Software Products which will make the
"Government-to-Citizen" services more inclusive.
When the current digital platforms like IndiaStack and National Health Stack
would be integrated with additional novel software products it will not only
give momentum to the economy of the country but will also help in bringing the
government's vision of making India a trillion-dollar digital economy by 2025.
The National Policy on Software Products 2019 will drive India to become a
global leader not only in its IT services but in its Software Products as well.