UPSC MAINS 2019: Cabinet approves National Policy on Software Products – 2019

Cabinet approves National Policy on Software Products – 2019


Topic: Cabinet approves National Policy on Software Products – 2019


Cabinet approves National Policy on Software Products – 2019


The Union Cabinet, chaired by the Prime Minister has approved the National Policy on Software Products – 2019 to develop India as a Software Product Nation.



  • The Indian IT Industry has predominantly been a service Industry. However, a need has been felt to move up the value chain through technology oriented products and services.
  • To create a robust software product ecosystem the Government has approved the National Policy on Software Products – 2019,
  • It aims to develop India as the global software product hub, driven by innovation, improved commercialization, sustainable Intellectual Property (IP), promoting technology start­ups and specialized skill sets.
  • Further, the Policy 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 USD ~70-80 billion with direct & indirect employment of ~3.5 million by 2025.



To develop India as a Software Product Nation and a global leader in conception, design, development and production of intellectual capital driven Software Products, thus, accelerating growth of entire spectrum of IT Industry of the country.



  • To promote the creation of a sustainable Indian software product industry, driven by intellectual property (IP), leading to a ten-fold increase in share of the Global Software product market by 2025.
  • To nurture 10,000 technology startups in software product industry, including 1000 such technology startups in Tier-II and Tier-III towns & cities and generating direct and in-direct employment for 3.5 million people by 2025.
  • To create a talent pool for software product industry through
    • up-skilling of 1,000,000 IT professionals,
    • motivating 100,000 school and college students and
    • Specialize 10,000 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/test beds and mentoring support.
  • In order to evolve and monitor schemes & programmes for the implementation of this policy, National Software Products Mission will be set up with participation from Government, Academia and Industry.

Software Products 2019



Implementation strategy and targets


Promoting Software Products Business Ecosystem

  • An Indian Software product registry will be created through industry ownership. This will act as a common pool of Indian Software Products thereby providing a trusted trade environment.
  • A conducive environment will be created in order to facilitate active participation of software companies in Capital Market.
  • A Single Window platform will be established for facilitation of Indian software product industry in fast-tracking legal and regulatory issues regarding (i) import and export and (ii) opening and closure of software product enterprises.
  • A classification system for Indian software products will be evolved through a model HS code. The model HS code will be further sub categorized based on the type of software products, its inter-linkages with other economic sectors, including services and hardware manufacturing.
  • The Indian Software Product Companies will be allowed to set off tax payable, if any, on the investments made (on an accrued basis) in R&D of indigenous software products.


Promoting Entrepreneurship & Innovation for Employment:

  • In order to create a conducive ecosystem, a programme of incubation will be initiated to nurture at least 10,000 software product startups, thereby generating direct and indirect employment for 1 million persons.
  • A dedicated Software Product Development Fund (SPDF) with a corpus of Rs. 1000 Crore will be created in the form of Fund of Funds. SPDF will participate in venture fund to provide risk capital so as to promote scaling up of market ready Software Products.
  • A Programme to support Research and Innovation on Software Products in Institutes of Higher Learning and Research will be initiated with a budgetary outlay of Rs. 500 Crore with participation from Government, Academia and Industry.
  • A programme for organising 20 dedicated challenge grants will also be initiated with an aim to solve societal challenges, such as in Education, Healthcare, Sanitation, Agriculture, persons with special needs (Divyangjan) etc in collaboration with line Ministries, state governments and Industry Bodies/ Think Tanks.
  • A Programme to create 20 domain specific Indian software product clusters around existing industry concentrations, such as in automobile, textile, financial services, electronic manufacturing, energy etc will be initiated.
  • A Centre of Excellence will be set up to promote design and development of software products with industry participation.
  • A common upgradable infrastructure will be created to support startups and software product designers to identify and plug cyber vulnerability.


Skilling and Human Resource Development:

  • For catering to large scale requirement of trained manpower in futuristic technologies, a FutureSkills programme has been initiated for up-skilling/re-skilling of 3 million IT Professionals in emerging technologies.
  • A national “Talent Accelerator” programme targeting, 100,000 school and college students, will be initiated for motivating young talent for software product development.
  • A talent pool of 10,000 committed software product leaders will be created that can meet the distinct skill set requirement for the sector to move up the value chain for developing technology and intellectual capital for product industry.


Improving Access to Domestic Market and Cross Border Trade Promotion

  • The registry of Indian software products will be integrated with Government e-market (GeM) and will also provide necessary handholding for marketing support.
  • Indian Product Startups / MSMEs will be encouraged to develop solutions for Smart Cities, healthcare, agriculture, e-learning, transport, fin-tech and addressing social challenges, such as, bridging digital divide, gender inequality, empowering the less privileged citizens and divyangjans.
  • Implementation of open APIs will be proactively promoted both for public and private sector to foster incremental innovation and to encourage inter-operability in Indian software products ecosystem.
  • An enabling framework will be developed for preferential inclusion of Indian software product in Government procurement in line with the Public Procurement (Preference to Make in India), Order 2017.
  • Special focus to Indian Software Products will be provided in international trade development programmes by:
    • Integrating Indian software products in India’s foreign aid programmes.
    • Providing opportunities and access under the various market development assistance programmes to showcase innovative products and solutions in important events, exhibitions, trade fairs etc.
    • Setting-up of specialized infrastructure in India and abroad for Software Product development so as to enhance presence of Indian Innovation in global markets.
  • Industry will be encouraged and incentivized to develop products to overcome language barriers across major Indian Languages and to create technological bridges between them and major international languages including English.


Implementation Mechanism:

The Government shall establish a “National Software Product Mission (NSPM)” to be housed in Ministry of Electronics and IT (MeitY) under a Joint Secretary, with participation from Government, Academia and Industry.


The broad objectives of the mission will be as follows:-

  • Design appropriate strategy for development of the software product industry to ensure optimum utilization of its potential and to establish India as a global Software Product Hub.
  • Recommend specific policy measures to ensure an enabling ecosystem for design, development, innovation, value addition, (take other words from Vision), based on use of ICT.
  • Recommend specific initiatives to be undertaken to tap the full potential of the domestic and the international markets for the Software product industry.
  • Monitor and collate various initiatives taken under this policy with an aim to create 3.5 million employment opportunities and boost software products revenue tenfold by 2025.
  • Facilitate various Government agencies and other bodies in promotion of Software Products, specific to the various programmes envisaged under this policy.
  • Encourage States to participate in programmes and promote Indian Software Products in line with this policy.
  • Monitor SPDF, Research & Innovation Fund.
  • Take any other measures as may be required in the context.


Sample Question:

Critically examine how the Software products policy will be positive step towards making India global hub?

Cabinet approves National Policy on Software Products 2019 - Info graphics - Mar6th