By Kunal Singhal, Managing Director and Founder, Eazy Business Solutions India, today, is at a crucial juncture. During the last decade, the country’s IT and software sector has grown from $118 billion to a projected $283 billion in FY 2024-25. Within this, the export revenues account for approximately $224 billion in FY 2022-25. However, there is still a deeper, largely untapped potential waiting to be realized. The country can leverage the domestic market, underserved niches, and the structural advantages that homegrown companies possess over global giants in delivering for Indian contexts.

First, Indian companies have an edge when it comes to understanding local pain points and gaps. Starting from regulatory compliance to regional language interfaces, along with rural connectivity constraints, there are many areas where global giants struggle to internalize Indian nuances. On the other hand, indigenous firms are closer to the ground, and they can innovate quickly. This proximity translates into better adoption, higher retention, and greater scope for innovation.

Second, the domestic software opportunity is huge. Historically, the Indian IT industry has focused more on exports. In financial year 2023-24, India’s software services exports, including those via affiliates, touched $205.2 billion; export estimates differ across sources depending on definitions. In contrast, the domestic market remains underpenetrated. As India seeks to digitize its more than tens of millions of MSMEs, modernize municipal services, and bring computational power to tier-II and tier-III cities, the demand for local software is expected to surge. Here, the local firms can overtake global giants if they make the right moves at the right time.

Third, the shift in the global services paradigm is favouring innovation over arbitrage. India’s software export market has been evolving for years. Currently, the product development and R&D services form a larger share. This evolution rewards firms that can build IP, platforms, and deep domain overlays.

Fourth, changes in global market are sharpening the advantages of Indian players. Rising wage arbitrage costs, geopolitical instability, and demands for data sovereignty are making pure offshoring model challenging to sustain. Indian companies, meanwhile, can stay onshore and deliver the services without visa bottlenecks or cross-border friction. In addition, government’s push towards data localization and Digital India makes the market conditions favourable for local firms. Such is the impact that global giants like Google are now emphasizing sovereign cloud deployments in India.

Governments can act as critical launch pads for indigenous software by adopting and validating them first in public systems, thus creating turning points for nascent product startups. India’s National Policy on Software Products (2019) already mandates preferential inclusion of Indian software products in government procurement. In defence too, the Indian Air Force recently procured indigenously developed software-based communication sets from BEL, signalling that mission-critical systems can be domestically supplied.

Globally, the U.S. DARPA has long funded high-risk, early-stage technologies (e.g. the Internet, GPS) that later became ubiquitous commercial platforms. Likewise, India’s DRDO has developed Maya OS, an indigenous operating system now being rolled out in Defence Ministry computers to reduce dependence on foreign software. By setting ministries and public agencies as first adopters, the government provides critical scale, operational validation, and visibility, lowering risk for private purchasers and accelerating local startups’ ability to compete.

Having said that, to fully claim this moment, indigenous players must scale up, invest in research, create strong partnerships, build robust governance systems, attract global capital, and manage quality at scale. There is also the opportunity of bridging the trust gap, as many Indian enterprises still lean towards the big names in the industry. But as successful domestic platforms demonstrate reliability, that mindset is shifting.

This is the time where new-age founders, technologists, and investors must step forward and create new opportunities for themselves. Parallelly, the existing big local players need to continue capturing the new markets, opening up field for Indian players to expand their businesses. The next wave of software growth is going to come from innovation and not from rewriting what works elsewhere. This is why it is important to build what works here. As Managing Director of Eazy Business Solutions, I see every day how this local insight and agility unlocks value that global players struggle to capture, and I believe that India’s software companies are poised not just to ride the wave, but to define it.

(Disclaimer: The above press release comes to you under an arrangement with NRDPL and PTI takes no editorial responsibility for the same.). PTI PWR