AgenciesNew Delhi: A proposal to ease procurement norms, facilitated by the Ministry of Electronics and IT, is expected to help Indian software companies secure more technology projects from the central and state governments.
The aim -- to uplift home-grown software product companies, in line with the government's "Atmanirbhar Bharat" (self-reliant India) scheme.
The committee is headed by IIT-Bombay’s DP Pathak and includes government officials as well as members from industry associations such as Nasscom and iSPIRT.
“If the Indian products have to be competitive, then the government will have to loosen its mindset when it comes to standard procurement norms. If the quality or the features of the Indian products match with any international brands, then procurement rules should give them a push,” the government official, who did not wish to be named, said.
A similar model RFP, to ease procurement of software services by various government bodies, was released previously.
The move to promote India-based products is a welcome step, said Raju Vegesna, Chief Evangelist, Zoho Corp.
“The government recently announced a grant for a local company to build a video conferencing tool, that’s a good initiative,” he said.
Keeping data of the government and users within the country and where that data is processed are important from a privacy point of view, Vegesna said.
Zoho is among the companies shortlisted in the first round by the government to build the video conferencing tool.
The model RFP document is likely to be ready within a month and the Centre will work with states to adopt it as a best-practice since such procurement norms cannot be binding on states.
“Even Indian service providers offer products from companies like Microsoft and Oracle when they bid for government contracts; if the departments start considering Indian products which match the quality of foreign companies but may lack the required experience, then it will be a big fillip to the Indian software products industry,” the government official added.
The government will also devise a way to facilitate recurring monthly payments, considering that most payment companies are based on a Software as a Service (SaaS) model.
The government currently does not transfer funds on a monthly basis but could address this issue by building an escrow account.
Sparsh Gupta, co-founder and CEO of SaaS firm Wingify, told ET that once Indian product companies find more resonance in the country, they may start to design products that solve local problems instead of doing so for the West, which is currently their largest market.
“Since Indian companies have to compete with global firms, they have to match their product features with those firms. Once India offers a larger market, this could change,” he said.
The Indian software product industry has so far remained in the shadows of the more successful services industry and the government has been trying to give it a boost through various initiatives under the Indian Software Products policy, which was cleared in February 2019.
The policy aims to position India as a hub for software product development, creating 6.5 million jobs with revenue targets of $70-$80 billion by 2025.
While Indian IT revenue is upwards of $170 billion, the software product pie is at $7.1 billion since most software products are imported.
“In these times of a crisis, the government needs to support the industry by increasing their procurement especially from Indian MSMEs and software product companies. Some of the norms around filing of Softex forms by Indian software product companies for every export made are redundant. There are other mechanisms which are simple and business friendly that can be used to get the same information,” said Nakul Saxena, Director-Public Policy, iSPIRT.
The aim -- to uplift home-grown software product companies, in line with the government's "Atmanirbhar Bharat" (self-reliant India) scheme.
According to a top government official, a government committee is drafting a model Request for Proposal (RFE) document for software products which will soften eligibility conditions such as revenue and work experience thresholds, need for third-party certifications and easier payment norms for Indian software products.
The committee is headed by IIT-Bombay’s DP Pathak and includes government officials as well as members from industry associations such as Nasscom and iSPIRT.
“If the Indian products have to be competitive, then the government will have to loosen its mindset when it comes to standard procurement norms. If the quality or the features of the Indian products match with any international brands, then procurement rules should give them a push,” the government official, who did not wish to be named, said.
A similar model RFP, to ease procurement of software services by various government bodies, was released previously.
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The move to promote India-based products is a welcome step, said Raju Vegesna, Chief Evangelist, Zoho Corp.
“The government recently announced a grant for a local company to build a video conferencing tool, that’s a good initiative,” he said.
Keeping data of the government and users within the country and where that data is processed are important from a privacy point of view, Vegesna said.
Zoho is among the companies shortlisted in the first round by the government to build the video conferencing tool.
The model RFP document is likely to be ready within a month and the Centre will work with states to adopt it as a best-practice since such procurement norms cannot be binding on states.
“Even Indian service providers offer products from companies like Microsoft and Oracle when they bid for government contracts; if the departments start considering Indian products which match the quality of foreign companies but may lack the required experience, then it will be a big fillip to the Indian software products industry,” the government official added.
The government will also devise a way to facilitate recurring monthly payments, considering that most payment companies are based on a Software as a Service (SaaS) model.
The government currently does not transfer funds on a monthly basis but could address this issue by building an escrow account.
Sparsh Gupta, co-founder and CEO of SaaS firm Wingify, told ET that once Indian product companies find more resonance in the country, they may start to design products that solve local problems instead of doing so for the West, which is currently their largest market.
“Since Indian companies have to compete with global firms, they have to match their product features with those firms. Once India offers a larger market, this could change,” he said.
The Indian software product industry has so far remained in the shadows of the more successful services industry and the government has been trying to give it a boost through various initiatives under the Indian Software Products policy, which was cleared in February 2019.
The policy aims to position India as a hub for software product development, creating 6.5 million jobs with revenue targets of $70-$80 billion by 2025.
While Indian IT revenue is upwards of $170 billion, the software product pie is at $7.1 billion since most software products are imported.
“In these times of a crisis, the government needs to support the industry by increasing their procurement especially from Indian MSMEs and software product companies. Some of the norms around filing of Softex forms by Indian software product companies for every export made are redundant. There are other mechanisms which are simple and business friendly that can be used to get the same information,” said Nakul Saxena, Director-Public Policy, iSPIRT.
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