The government on Thursday (February 28) approved the National Policy on Software Products 2019 with an outlay of INR 5,000 Cr fund, aimed at nurturing 10K startups in the software product industry and generate 3.5 Mn employment by 2025.
“National Policy on Software Products 2019 as approved by the Cabinet aims to encourage innovation, startups and creation of intellectual property (IP) by developing greater collaboration between government, industry, academia and other stakeholders,” Information Technology Minister of India, Ravi Shankar Prasad, said in a tweet.
With the policy, prepared by the Ministry of Electronics and Information Technology (MeitY), the government is looking to create a robust software product ecosystem in India — and said it is aligned with other government initiatives such as StartUp India, Make in India, Digital India and Skill India. It aims to make India a $70 -80 Bn software products industry by 2025.
As part of the policy, the government has said to initially outlay INR 1,500 Cr to implement the programmes for software development and research, for over a period of seven years.
The National Policy on Software Products 2019 primarily aims to achieve five missions, as follows:
- To promote the creation of a sustainable Indian software product industry driven by intellectual property (IP), leading to a 10-fold increase in India’s share of the Global Software product market by 2025.
- To nurture 10K technology startups in the software product industry, including 1K technology startups in Tier 2 and Tier 3 towns and cities, and generate direct and indirect employment for 3.5 Mn by 2025.
- To create a talent pool for the software product industry through up-skilling of 1 Mn IT professionals, working with one Lakh school and college students, and generate 10K specialised professionals that can provide leadership.
- To build a cluster-based innovation-driven ecosystem by developing 20 sectoral and strategically located software product development clusters having integrated ICT infrastructure, marketing, incubation, R&D/testbeds and mentoring support.
- In order to evolve and monitor scheme and programmes for the implementation of this policy, the National Software Products Mission will be set up with participation from Government, Academia and Industry.
Apart from the massive fund-of-funds, the government has also announced a programme to boost the research, development, and innovation in the software sector, with a budgetary allocation of INR 500 Cr to help MSMEs and promote IP-driven software product creation.
Industry Speak: NPSP 2019, A Great Initiative If Done Right
Government’s initiative to approve The National Policy on Software Products has been received well by the startup industry. Angel Investor Mohandas Pai tweeted, “Great policy! Long awaited, thanks much!”
According to the industry body, NASSCOM, the policy recommendations are aligned to its suggestions on sectorial software product development clusters, talent accelerator programs and the initiative to nurturing of software products startups under TIDE 2.0 and NGIS.
“Today, there is increased convergence of hardware and software, which is creating a new segment in product innovation. We hope the policy would create at least 30 software product-driven companies from India… create a talent pool of skilled software product developers with over one million entry-level professionals by 2025,” NASSCOM said in an email correspondence.
According to iSPIRT’s director of public policy, Nakul Saxena, the policy offers a 360-degree approach towards developing India’s potential to be a global software product hub. The foundation estimates India to become a $ 100 Bn software product industry by 2025.
“It’s a great step towards recognising that India needs to transition from software service to software product. If done right, we can have more than 10k startups creating a potential 1 Cr jobs and impacting the livelihood of five Cr Indians by 2025,” Fintech startup ToneTag founder, Kumar Abhishek, said.
The policy is likely to give a major boost to India’s IT industry, comprising software products, IT services, engineering and R&D services, ITES/BPO, hardware, and ecommerce. According to government’s own record, investments in electronics manufacturing, including computer hardware, software and electronics, stood at $32.7 Bn in FY 2017-18, registering a growth rate of 24%.