IT ministry to set up software product council with outlay of Rs 1,500 cr

Indian product companies like InMobi, Freshdesk, Tally and others may have a reason to rejoice if the government’s ongoing efforts to implement a software product policy come to fruition.

The Ministry of Electronics and Information Technology (MeitY) is working on creating a software product council, including members from the government, academia and industry that will work on implementing a software product mission.

The Mission is part of the implementation plan of the National Policy on Software Products, which was notified by the Cabinet in February, just before the general elections began.

“All the major stakeholders and people who matter in the software product industry are represented. We have taken certain inputs from major stakeholders, and based on their inputs we have proposed an architecture,” said a senior official at the MeitY.

The policy has an initial outlay of Rs 1,500 crore for seven years, and aims to lead a tenfold increase in India’s share of global software market by 2025.

“The idea is to engage with MeitY on a continuous basis, and build a mechanism for industry to work with the ministry,” said one of the people working on the Mission from the industry side.

The software product policy will also promote 10,000 technology start-ups in software product industry, including 1,000 in tier-2 and tier-3 towns, generating direct and indirect employment for 3.5 million people by 2025, creating a talent pool by improving skills of 1 million IT professionals, 100,000 school and college students, and training 10,000 professionals for leadership roles.

Work has also begun on building an Indian software product registry, which will act as a common pool of Indian software products, the ministry official added. 

HSN Codes for software products

HSN Codes or harmonised system of nomenclature is a set of codes used to classify merchandise that is traded across borders.

Under the goods and services tax regime, all IT software has been treated as a service, which can be sold under a “licence to use”, while software products are classified as “goods” eligible for cross-border trade.

Bengaluru-based product software think tank iSPIRT has often spoken about the need to provide for a ‘Digital Goods’ regime (which) will help India embark upon a software product wave.  The ministry official said a resolution to this was also being discussed. “We are also discussing to identify and specify HSN codes, which is a customs tariff structure. We are discussing if they can be given to intangible goods status for software products,” he added.

It is understood that if these issues are resolved, the codes will be applicable to both existing and new product software firms.

Policy Road Map

•  The software product council will include members from govt, academia and industry
• Policy aims to lead to tenfold increase in India’s share of global software market by 2025
• It will promote 10,000tech start-ups and build an Indian software product registry