Indian SaaS market likely to grow to $100 billion by 2035, says report

India's software-as-a-service (SaaS) industry is expected to touch $100 billion by 2035, from $20 billion currently, helped by artificial intelligence-led discontinuities in automation, cost-effective software development, expanding small and medium business (SMB) adoption, and deepening government digital initiatives, according to a report by SaasBoomi.

 

Growing enterprise artificial intelligence and cloud adoption will be a major growth lever, expected to contribute $35 billion in market expansion. Companies across banking, financial services and insurance (BFSI), healthcare, and manufacturing are investing in AI-powered automation and cloud-based efficiencies, pushing software demand across sectors.

 

Digital-native businesses will increase their software spend from $4.6 billion in 2025 to $26 billion by 2035, as they build deeper digital capabilities.

 

“For Indian SaaS firms, success will depend on their ability to build localised solutions that scale globally, leveraging AI and vertical SaaS to tackle challenges that are uniquely Indian. The next decade will be defined by the ability of Indian companies to address these gaps,” said Avinash Raghava, founding volunteer and chief executive officer, SaaSBoomi.

 

The report, published together with 1Lattice, added that SMBs represent another major driver of growth, as vertical SaaS solutions are set to unlock a $13 billion opportunity.

 

While global SaaS players have traditionally dominated the horizontal software market, India’s growing start-up ecosystem is building industry-specific solutions that cater to local regulatory and business requirements.

 

Another area of growth is the cybersecurity market, expected to surge to $10 billion from just $1.6 billion currently. With India’s digital economy expanding rapidly, companies are investing heavily in compliance-driven security solutions, data protection frameworks, and automation tools to meet regulatory requirements such as the Digital Personal Data Protection (DPDP) Act 2023 and the Reserve Bank of India’s fintech security norms.

 

Amar Choudhary, chief executive officer and co-founder, 1Lattice, said, “The future of SaaS will belong to companies that master efficiency without sacrificing ambition. Investors today are looking for capital-efficient businesses with strong fundamentals.”