India’s software market is projected to grow 21.9% YoY in 2024, driven by AI, cloud, and digital transformation, says IDC.
INDIA, 05 August 2025 – According to the International Data Corporation (IDC) Worldwide Semiannual Software Tracker 2024H2 (July – December), India’s software market is projected to reach US$18.4 billion by the end of calendar year 2025, up from US$15.2 billion in 2024, reflecting a growth of 21.9% year-over-year (YoY) compared to 2023.
In 2024, India accounted for 20.5% of the overall Asia/Pacific excluding Japan and China (APeJC) software market. Microsoft, Oracle, and SAP maintained their leadership position in the Indian market during this period.
IDC estimates India’s overall software market to grow at a compound annual growth rate (CAGR) of 18.8% potentially reaching US$35.9 billion during the 2025–2029 forecast period. During this period, the three primary categories of the software market, as classified by IDC – applications, application development and deployment (AD&D), and systems infrastructure (SI) software, are expected to grow at a CAGR of 15%, 31.2% and 13.2% respectively.
According to IDC, engineering, collaborative, customer relationship management (CRM) , enterprise resource management (ERM), and content workflow and management applications are the leading software segments in terms of revenue in 2024. Growth was driven by Artificial Intelligence platforms with a YoY growth of approximately 90.7% in 2024, followed by collaborative applications and endpoint management at 32.7% and 29.6% respectively.
India’s strong economic growth, along with a thriving startup and SME ecosystem, continues to drive demand for cost-effective, scalable, and cloud-based software solutions. Government initiatives promoting indigenous software development and adoption of emerging technologies such as AI, cloud computing, and IoT, have pushed companies to take digitalization to newer heights across industry verticals. We are also seeing an increase in demand for industry-specific applications, particularly in healthcare, education, logistics etc.
However, the market also faces some challenges. Indian organizations remain heavily reliant on legacy systems, and modernizing these systems often involves significant costs and specialized talent. Despite India’s large IT workforce, demand for advanced skills in AI, cybersecurity, and cloud continues to outpace supply. The Indian government, in collaboration with major technology firms, has launched reskilling and upskilling initiatives to address this gap.
Budget constraints, particularly among smaller enterprises, continue to hinder software investments in non-critical areas. Additionally, uneven digital infrastructure between Tier-1 and Tier-2/3 cities is slowing the pace of adoption across regions.
“AI remains the buzzword, whether it’s GenAI, Agentic AI, or plain old AI/ML, as Indian enterprises accelerate adoption across their ecosystems,” said Hemanth Gudiwada, research analyst, IDC India. “As organizations step up their AI journey, they continue to build, secure, and strengthen their core IT systems – ranging from databases and network to ERP and CRM platforms – to align with data residency and protection regulations. With a mix of legacy systems, hybrid, and multi-cloud deployments, Indian organizations are looking for more robust and flexible software solutions. To meet these requirements, software providers should focus on strengthening their local partnerships and delivery capabilities.”
*All market size and growth percentage numbers are in constant currency.
For more information about IDC’s Worldwide Semiannual Software Tracker, please contact Jackie Kliem at 508-988-7984 and jkliem@idc.com.
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About IDC
International Data Corporation (IDC) is the premier global provider of market intelligence, advisory services, and events for information technology, telecommunications, and consumer technology markets. With more than 1,300 analysts worldwide, IDC offers global, regional, and local expertise on technology, IT benchmarking and sourcing, and industry opportunities and trends in over 110 countries. IDC’s analysis and insight helps IT professionals, business executives, and the investment community to make fact-based technology decisions and to achieve their key business objectives. Founded in 1964, IDC is a wholly owned subsidiary of International Data Group (IDG), the world’s leading tech media, data, and marketing services company. To learn more about IDC, please visit www.idc.com. Follow IDC on Twitter at @IDC and LinkedIn. Subscribe to the IDC Blog for industry news and insights.
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