India's SaaS Sector Set to Become a Global Powerhouse

India's Software-as-a-Service (SaaS) sector is experiencing an unprecedented phase of growth and innovation, positioning itself as a pivotal player in driving global digital transformation. Industry leaders attribute this success to the Indian government's supportive policies and substantial infrastructure investments.

In the fiscal year 2022-2023, the export of computer software and services surged by an impressive 12.2%, indicating a rising global demand for Indian SaaS offerings. A recent report by advisory firm 1Lattice and venture investor Sorin Investments forecasts that India's global market share in SaaS products will likely reach 8% by 2028.

The domestic SaaS industry is on track to hit $50 billion by 2030, according to a report by Bessemer Venture Partners (BVP), driven by the government's favorable policies and ongoing infrastructure investments. Hitesh Sahijwaala, EVP of sales and distribution at Cloud lending startup Lentra, highlighted the growing global reliance on SaaS applications as businesses shift towards Cloud-based solutions, enhancing operational efficiency and accessibility.

India's SaaS sector is becoming a significant force, fueled by continuous investments in emerging technologies by both the government and enterprises. A Nasscom report identifies key drivers, including a focus on application development, automation, verticalized products, SaaS, data migration for Artificial Intelligence, and Cloud enterprise spending.

The country currently hosts nearly 2,000 SaaS startups. Prabhu Ram, Head of the Industry Intelligence Group at market intelligence firm CMR, emphasized the sector's explosive growth potential, driven by a combination of a large and skilled talent pool and increasing digitization nationwide.

Government policies aimed at fostering innovation, talent development, and infrastructure investments are expected to further elevate India's SaaS sector on the global stage, turning it into a powerhouse. Startups are aligning with industry needs, developing API-driven digital sourcing ecosystems for unassisted lending and faster market entry. Additionally, these startups are tailoring SaaS solutions to help lending platforms meet regulatory requirements, fostering expansion opportunities.