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India Creates $705 Mn Fund to back Software Products Startups

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India Creates $705 Mn Fund to back Software Products Startups

The Union Cabinet, Indian government has approved the National Policy on Software Products 2019 and to support it the government has also approved the creation of a 5,000 crore ( ~ US$705 million) Fund to back software products startups in the country.

The National Policy on Software Products 2019 is expected to lead to the formulation of several schemes, initiatives, projects and measures for the development of Software products sector in the country.

With a key mission to create 10,000 startups in India software products space, the government wants to create employment for 6.5 million people, both directly and indirectly.

Among 10,000 startups creation objective, the government also aims to include 1,000 technology startups in Tier-II and Tier-III cities. The government will also create 20 software development clusters in strategic locations, which will comprise integrated ICT infrastructure, marketing, incubation, R&D/Testbeds and mentoring support.

Initially, an outlay of Rs 1500 Crore is involved to implement the programmes/ schemes envisaged under this policy over the period of 7 years. Rs 1500 Crore is divided into Software Product Development Fund (SPDF) and Research & Innovation fund.

Besides 5,000 crore Fund, the government also announced allocation of 500 crore to help MSMEs and promote IP-driven software product creation.

A programme to boost R&D and innovation in Software Product sector has also been launched.

The Policy also aims to align with other Government initiatives such as ‘Start-up India’, ‘Make in India’ and ‘Digital India’, ‘Skill India’ etc so as to create Indian Software products Industry of US$70-80 billion with direct and indirect employment of 3.5 million by 2025.

In India, a number of software product firms have grown over the last decade from a little over 100 in 2000 to nearly 2400 in 2013. According to Nasscom, Indian software products sector is estimated to be worth $7-billion and with 3,720 companies in 2018 is growing at a rate of 9.5% annually.

According to IBEF, Software products along with ITeS accounted for 22.2% of total IT exports from India, during FY-18.

Source – Economic Times

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Vardaan
Founding editor at IndianWeb2, he's been writing at IndianWeb2 since 2007. Apart from blogging he had a professional career of software developer, Ux developer and search engine marketer in past. His vision of IndianWeb2 has been laid down so as to showcase, encourage and propagate Indian startups, innovation and entrepreneurship ideas.

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