For decades, India was the world’s IT workbench, exporting talent, services, and code to global software giants. That’s changing fast. Today, India stands at the forefront of a massive SaaS/tech product & AI adoption wave fueled by cloud infrastructure, AI acceleration, and an urgent domestic drive for automation. It is rapidly transforming from a service center to a product-led revenue engine, no longer just supporting global platforms but building some of the world’s most strategic enterprise software for India and the world.
While the trend of Indian tech product companies selling into the USA will continue, we are beginning to see early signs of the Indian ecosystem adopting tech products, and more importantly, valuing them and willing to pay for world-class products.
There used to be a time when India played a follower role in tech product creation, but that is no longer the case!
India’s software moment:
Before 2015, enterprise software adoption in India was still in its infancy. The market was dominated by global multinationals like Microsoft, Oracle, and SAP, with most Indian businesses running on-premise systems and viewing software as a support function, not a growth lever.
By 2020, early signs of change were emerging. Mobile-first platforms, fintech innovation, and initial cloud migrations nudged companies toward digital workflows. SaaS/Tech products started to pick up, not just by startups, but also across mid-market and enterprise segments.
However, the real inflection point came with COVID. The pandemic forced every industry across finance, retail, logistics, healthcare, and education to reimagine operations through a digital lens. Cloud-first, subscription-based, and now AI-driven software went from “nice to have” to “must have”.
Key drivers powering AI product adoption in India:
1. Rise of Digital Natives Companies-
Over the past decade, India’s digital-native ecosystem has grown from a handful of startups to a considerable force reshaping the country’s business landscape. In 2010, the digital-native ecosystem featured a few notable names e.g. Flipkart, InMobi, mostly private, with rare public listings like MakeMyTrip.
Fast forward to 2025, and India is now home to an estimated 160,000+ digital-first companies, including approximately 600+ digital natives with 500 Cr+ revenue scale like Swiggy, Urban Company, Zoho, Razorpay, and dozens of publicly listed players like Zomato, Nykaa, and Policybazaar. (Source: Department for Promotion of Industry and Internal Trade, Tracxn)
What changed? A trifecta of forces: a 5X surge in smartphone users (now 800 Mn+), ultra-cheap data (top 5 globally for affordability), and public digital infrastructure (Aadhaar, UPI, ONDC) that unlocked frictionless, scalable innovation.
This momentum isn’t slowing. By 2030, India could see 500,000+ digital-native companies and 500+ publicly listed companies, powered by advancements in AI, hyper-localization, and deep penetration into tier 2/3 markets.
India’s digital-native companies will become a major engine of software demand in the coming decade. As of 2024, these digitally native firms contribute approximately 6% of India’s GDP, generating $240 Billion in revenue. This segment is expanding rapidly and is expected to drive about 12% of India’s GDP by 2030. (Source: Indian Council for Research on International Economic Relations Report on Estimation and Measurement of India Digital Economy)
India’s growing digital-native companies are cloud-first, rely on best-in-class SaaS/tech product tools for automation, compliance, and customer experience. These digital natives invest early in scalable, enterprise-grade systems. Unlike traditional businesses, they are built around tech, prioritizing rapid iteration, data-driven decisions, and full-stack digitisation from day one.
This translates into significant software spend across the stack: devtools, CRM, marketing automation, data analytics, and security. Digital natives now spend ~1-2% of their revenue on software, nearly 2-4X more than traditional enterprises. (Source: 1Lattice SaaSBoomi 2025 Report)
Their preference leans heavily toward local SaaS/tech product tools, 20% to 50% cheaper than global counterparts and designed for India’s vernacular and mobile-first realities. SaaS/Tech product companies like Razorpay, Zoho, DarwinBox, and Chargebee have emerged to cater to domestic software needs, providing tools for everything from payments and CRM to payroll and subscription billing. Digital natives are adopting homegrown AI native tools like Beacon for their exceptional product quality and seamless integration capabilities.
While large incumbents still dominate overall IT spending, digital natives are rapidly gaining momentum.
2. AI-Led Enterprise Digitisation-
The COVID-19 pandemic served as a brutal stress test for Indian enterprises, exposing critical flaws in legacy systems, while forcing large-scale shifts towards digital adoption.
One of the sharpest indicators of this digital acceleration has been the surge in cloud adoption. The shift from on-premise systems to cloud infrastructure has unlocked unprecedented scale, flexibility, and cost savings for businesses across sectors.
As a result, 65% of Indian enterprises now operate on cloud or hybrid infrastructure, up from just 30% before the pandemic, a transformation reflected in AWS India’s 2.35X revenue growth in two years, reaching ₹1,278 Cr in FY23. (Source: MCA Filings)
The post-COVID era has also led to a wave of GenAI adoption, fundamentally transforming how large enterprises manage their operations. Indian companies are now starting to embed AI deeply into their workflows to enhance visibility, control, and data-driven decision-making across functions such as customer support, finance, and product engineering.
Major conglomerates are leading this transformation. The TATA Group, for example, is running over 100 GenAI projects across e-commerce (product cataloguing) and manufacturing (predictive maintenance). Mahindra & Mahindra is deploying AI copilots in manufacturing to reduce downtime, monitor machine health, and optimize energy usage. Reliance Industries is embedding AI across its retail (JioMart), telecom (Jio), and logistics operations through its “Jio Brain” initiative. (Source: TCS AGM 2024, The Economic Times, RIL AGM 2024)
3. Transformation of BPO and Rise of GCC-
India’s $50 Billion BPO/ITeS industry is undergoing its most significant transformation since the early days of outsourcing.
Rising labor costs (up 25% post-COVID) and fierce competition from low-cost markets like the Philippines and Bangladesh push Indian BPOs to accelerate the adoption of AI, automation, and advanced analytics to protect margins and boost efficiency.
Convin and Uniphore are used by dozens of BPOs to analyze millions of customer calls every month, cutting agent training time. Global products like SanasAI cater to this market by offering accent translation technology that enables BPO agents to sound more localised to their target markets.
BPOs are not just adopting software, they’re building and productising it. Firms like EXL and WNS have shifted from traditional service delivery to developing proprietary automation, analytics platforms, reflecting a pivot toward product-led offerings that are more “sticky” and drive long-term growth.
India has emerged as the global hub for Global Capability Centers (GCCs), with 1,500+ centers generating $50 Billion+ in revenue in 2024. Leading firms like JPMorgan, Unilever, and Wells Fargo now run critical operations from their Indian GCCs, shifting from cost arbitrage to intelligent automation. (Source: Nasscom)
A major growth area within GCCs is the finance function, comprising accounts payable and receivable, financial planning and analysis (FP&A), treasury, tax compliance, and audits, increasingly being digitized to drive efficiency, accuracy, and real-time insights.
This creates a substantial opportunity for Fintech SaaS companies. Platforms like Clear streamline tax compliance, e-invoicing, and GST workflows tailored to India’s regulatory landscape, while HighRadius offers AI-driven solutions for treasury and receivables, enabling faster, more efficient finance operations.
These platforms bring a strong combination of global-grade product quality and deep understanding of local regulatory contexts, making them ideal partners for GCCs.
4. Digitising the Manufacturing Value Chain-
SaaS/Tech products’ adoption in India’s manufacturing sector has accelerated sharply post-COVID, fundamentally transforming operations from procurement to production and compliance.
The COVID period was a true stress test for Indian manufacturing and supply chains, and most players recognised the need to rapidly digitise their operations, not only to bring in efficiency, but more importantly, to have significantly stronger control over operations
Pre-pandemic, most manufacturers allocated just 1-2% of their OPEX to IT, focused primarily on basic ERP systems and spreadsheets. By 2024, IT budgets have expanded to 3-5%, with digital-first verticals like EV OEMs reaching 7-8%.
For example, TATA Motors has doubled its spend on IT, Software to ₹5,300 Cr in FY24 compared to FY21, deploying digital solutions across operations to enhance production efficiency, accelerate turnaround times, and optimize costs.
The shift began with pandemic-era disruptions. Manufacturers faced significant supply chain breakdowns due to outdated, manual inventory tracking methods, such as Excel or paper-based systems. The lockdowns exposed critical inefficiencies in real-time visibility, forecasting accuracy, sourcing, and demand planning, forcing manufacturers to rethink their reliance on traditional, siloed systems.
This has led to a sharp acceleration in tech product adoption across the sector. We are in the early stages of this wave & this is where the opportunity lies for homegrown tech product companies to capture this new market: building tech products that meet global standards but are built with an understanding of the nuances of operating a business in India.
Shop floors are evolving quickly with the adoption of IoT sensors and cloud-based monitoring tools. Platforms like Infinite Uptime (predictive maintenance) and SwitchOn (AI-driven visual inspection and quality control) are minimizing downtime in early-adopter plants.
Digitization of supply chain and logistics is gaining momentum as manual inventory tracking leads to stockouts, excess inventory, and lost shipments.
Government mandates, such as the PLI scheme, now require digitized procurement, logistics, and compliance, driving the adoption of SaaS/tech products for quality tracking, real-time audit trails, and ESG workflows. Tools like AltiusHub are setting new standards for automating regulatory compliance, factory inspections, and audit readiness, especially in sectors like pharma and automotive.
SaaS/Tech products are rapidly becoming the backbone of Indian manufacturing, transforming every aspect of the value chain, from supply planning and sourcing to shop-floor production, logistics, and compliance
India’s appetite for high-quality tech products:
India’s shift from a service-led to a product-driven tech economy is already happening. The rapid adoption of global platforms like Salesforce and ServiceNow signals a clear shift - Indian enterprises are not just adopting software, they are willing to pay for products that deliver global-grade performance and impact.
Salesforce, for instance, doubled its India revenue from ₹4,500 Cr in FY21 to ₹9,200 Cr in FY24, driven largely by deep adoption in the BFSI sector. Banks have signed multi-year contracts, leveraging Salesforce for revenue automation, compliance tracking, and intelligent cross-selling.
ServiceNow has seen even faster acceleration, with India revenue tripling from ₹950 Cr in FY21 to ₹2,800 Cr by FY23, making it the company’s fastest-growing market in the Asia-Pacific region. A significant portion of this growth comes from the IT/ITeS sector, where players like TCS use ServiceNow to automate internal workflows, manage multi-cloud infrastructure, and streamline enterprise support systems.
For Indian SaaS founders and product builders, this is a huge unlock, as they don’t need to look only at Western markets to build a big software business. If the product is world-class, India will buy it.
The road ahead:
As India becomes a $1 Trillion digital economy, Software and AI will play a key role in driving this transformation.
We expect to see a rise in AI-powered platforms, apps that prioritize local languages, and industries using India’s digital infrastructure, with enterprise software created from India for India and the world