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National Policy on Software Products, 2019

By - Kulin Dave on May 7, 2019

The Union Cabinet approved the National Policy on Software Products, 2019[1] (“Policy”) on 28.02.2019. The Policy aims “to develop India as a software product nation and a global leader in conception, design, development and production of software products.”


  1. Achieve a ten-fold increase in share of the Indian IT-ITES industry in the global software product market by 2025.
  2. Nurture 10,000 startups dealing in the software product industry, including 1000 startups in Tier-II and Tier-III towns and cities and generate cumulative employment for 3.5 million people by 2025.
  3. Up-skill 1,000,000 IT professionals; motivate 100,000 school and college students and specialise 10,000 professionals.
  4. Develop 20 sectoral and strategically located software product development clusters with integrated infrastructure and other facilities.
  5. Set up a National Software Products Mission with participation from the Government, Academia and Industry.


  1. Promoting Software Products Business Ecosystem:
  2. An Indian software product registry to act as a common pool of Indian software products in a trusted trade environment.
  3. Capital market participation by India software companies.
  4. A single window platform to facilitate fast-tracking legal and regulatory issues regarding import-export and opening and closure of software product enterprises.
  5. A classification system for Indian software products along the model HS code, with appropriate sub-categorisations. This will facilitate tracking and ease export of such products and help gather statistical data for further action.
  6. A set-off against tax payable by Indian software product companies on the investments made in research and development of indigenous software products.
  1. Promoting Entrepreneurship & Innovation for Employment:
  2. An incubation programme for at least 10,000 software product startups, 1000 of which shall be set up in Tier-II and Tier-III town and cities. The programme will provide technical and infrastructure assistance, mentoring support, seed fund, research and development, testing facilities and marketing and branding support.
  3. A Software Product Development Fund (“SPDF”) with a corpus of Rs. 1000 Crore and will participate in venture fund to promote scaling up of market-ready software products. This scheme will create a corpus of Rs. 5000 Crore with the end target to have at least 100 Indian software product companies with valuation of Rs. 500 Crore or employing 200 persons.
  4. A Research and Innovation Fund (“R&I Fund”) to promote innovation in institutes of higher learning with a budgetary outlay of Rs. 500 Crore. Grants-in-aid will be provided to Indian MSMEs and start-ups for undertaking research with academic/research institutes leading to IP development. A matching fund from such applicants will be a pre-requisite and will ensure absorption of the products of such research. An organisation to commercially leverage such innovation will be identified.
  5. 20 dedicated challenge grants to solve societal challenges in collaboration with ministries, state governments and industry bodies/ think tanks.
  6. 20 domain specific Indian software product clusters around existing industry concentrations, such as in automobile, textile, financial services, electronic manufacturing, energy etc. These clusters will have integrated ICT infrastructure, marketing, incubation, research and development/test beds and mentoring facilities. Technical and financial support will be extended up to 500 technology companies so as to achieve global foot print.
  7. A Centre of Excellence to design and develop software products with industry participation.
  8. Cyber-security interventions for startups and software product designers, through a common upgradable infrastructure.
  1. Skilling and Human Resource Development:
  2. A FutureSkills programme to up-skill/re-skilling 3 million IT Professionals in emerging technologies, including 1 million IT professionals with competencies required for IP driven software products. This will be implemented through (i) modification in existing course curriculum, (ii) short term training programme, (iii) national competency tests in consultation with the industry. The programme will be implemented in partnership with educational institutes, both public and private, identified industry bodies and the National Skill Development Mission.
  3. A national talent accelerator programme targeting 100,000 school and college students to attract young talent.
  4. A talent pool of 10,000 software product leaders to help develop technology and intellectual capital for the software product industry. They will be interlinked with mentor pools for software product incubators and clusters.
  1. Improving Access to Domestic Market and Cross Border Trade Promotion:
  2. A registry of Indian software products, integrated with Government e-market (GeM).
  3. Hackathons to identify Indian product startups/MSMEs to develop solutions for Smart Cities, healthcare, agriculture amongst others and to address social challenges such as bridging digital divide, gender inequality amongst others.
  4. Open APIs for public and private sector to foster innovation and encourage inter-operability in Indian software products ecosystem 2017.
  5. Preferential inclusion of Indian software products in Government procurement as per the Public Procurement (Preference to Make in India), Order 2017.
  6. Promotion of Indian software products in international trade development programmes by leveraging India’s foreign aid programmes[50], providing access under various market development assistance programmes and setting-up specialized infrastructure in India and abroad for software product development.
  7. Incentives to develop products to overcome language barriers across major Indian languages and major international languages including English.
  • plementation Mechanism:
  • A “National Software Product Mission” (“NSPM”) to be housed in MeitY under a Joint Secretary with industry and academia participation.
  • The broad objectives of the NSPM will be to:
  • Design an appropriate strategy for the development of the software product industry.
  • Recommend measures to create an enabling ecosystem for design and development in the IT-ITES sector.
  • Recommend initiatives to tap the full potential of the domestic and the international software product markets.
  • Monitor and collate various initiatives taken under this policy.
  • Facilitate Government agencies and other bodies in promoting software products.
  • Encourage States to contribute to the promotion of Indian software products.
  • Monitor SPDF and the research and innovation fund.

The Policy will be implemented by MeitY through initiation of appropriate programmes & schemes, as per recommendation of NSPM, in which MeitY’s organizations, such as, Software Technology Parks of India(STPI) shall play a lead role besides Centre for Development of Advanced Computing (CDAC), National Informatics Centre(NIC),Industry/ Industry bodies and Institutes of Higher Education & Research.

Contributed by - Kulin Dave


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