SaaSBoomi, a community of SaaS founders, projects India’s domestic software market to grow fivefold from the current $20 billion to reach $100 billion by 2035. The primary growth drivers for this increased software consumption are seen to be AI-led disruption, greater tech adoption by small and medium businesses, growing number of startups and an increased migration of businesses to cloud, SaaSBoomi said in its latest annual report.

According to the report, India’s current software market is estimated to be around $20 billion with global service providers cornering around 75% of the market share. However, over the last 10 years Indian software service providers have clawed back their share from around 5% of a $3 billion market in 2015, to the current 25%. Gowri Shankar Nagarajan, volunteer at SaaSBoomi and VC at Antler, said that there is a possibility of domestic players capturing up to 50% market share of the $100 billion.

Noting India’s overall tech spends catching up with global average as a percentage of its GDP, the report puts global IT spends in 2025 at 4.9% or $5,600 billion and India spending at around $160 billion or 4.4% of GDP. Interestingly, in the last 10 years, spends on devices has consistently grown higher than the rest of the segments from 1.3% in 2015 to 1.7% in 2025. However, India’s software spend at 0.6% of GDP still lags the global average of 1.1%. Over the next 10 years horizontal SaaS solutions such as CRM, HRMS, collaborative tools are projected to grow at a compounded annual growth rate of 14% to reach $48.4 billion. “Growth in spending on Vertical software solutions will outpace the horizontal solutions driven by industry-specific challenges requiring custom solutions – (AI driven fraud detection in BFSI, telemedicine and EHR in Healthcare, IoT driven automation in manufacturing) and generic software won’t cut it. Within horizontal solutions - CRM expected to overtake ERP while Cybersecurity expected to grow significantly” the report states. Avinash Raghava, CEO, SaaSBoomi, who has also been a VC investor sees the success of Indian SaaS firms depending on their ability to build localised solutions that scale globally, leveraging AI and vertical SaaS to tackle challenges that are uniquely Indian. “The next decade will be defined by the ability of Indian companies to address these gaps.”

With India leading globally in creating digital infrastructure (DPI) at scale, SaasBoomi projects, the Government of India’s spends on software to grow from the current $1.6 billion to $8 billion by 2035. With the country looking to expand its DPI, software companies will have opportunities other than tap into areas such as AI integration across 500-plus government schemes for instance crop forecasting – Kisan AI, smart cities programmes that will drive higher penetration of Internet of Things in traffic management, waste management, and the National Digital Health Mission.