Policy drive puts Indian enterprise software on a collision course with global giants

Amid rising trade tensions and restrictions on cross-border tech talent, New Delhi is signaling a shift toward homegrown enterprise software.

IT Minister Ashwini Vaishnaw recently highlighted Zoho as a viable alternative to Microsoft’s productivity tools, underscoring efforts to promote local vendors in a market long dominated by global players.

Multinationals such as Microsoft, Oracle, and SAP still control most mission-critical deployments in India, but policymakers are increasingly encouraging domestic adoption.

The push comes at a time when Indian firms are also seeking to insulate themselves from geopolitical uncertainty, trade restrictions, and higher costs of depending on foreign providers.

The stakes are high, with IDC projecting India’s software market to reach $18.4 billion by the end of 2025 from $15.2 billion in 2024. India accounted for 20.5% of the APAC software market outside Japan and China in 2024, with Microsoft, Oracle, and SAP holding top positions during this period.

Domestic challengers gain visibility

Vendors, including Zoho, Ramco Systems, Freshworks, Darwinbox, PeopleStrong, and LeadSquared, are being seen as local challengers across areas like productivity, ERP, CRM, and HR platforms.

Many of these companies have historically built their businesses on exports, but the government’s calls for digital sovereignty and procurement preferences are prompting some to look more closely at the domestic market.

Zoho has long competed globally with Microsoft and Google in productivity software and is seeing stronger traction at home.

“For the past few years, India has been our fastest-growing market and the second largest market globally,” said Praval Singh, VP of marketing and customer experience at Zoho.

“While India has been one of our key markets for a long while, the endorsement from the minister helps validate the value our products provide,” Singh added.

The company has already seen adoption across the public sector. During the pandemic, its platforms supported response and vaccination tracking.

More recently, as part of the National Informatics Center’s (NIC) transition to a modern office suite, Zoho was chosen as the email and collaboration provider for more than 6,000 government departments. “Many departments have already been onboarded under this plan, and some are in progress as we speak,” Singh said.

Ramco Systems, which offers solutions in areas such as global payroll, ERP, and logistics, said the government’s emphasis has helped it expand into sectors including manufacturing and textiles.

“Some noteworthy ones include a large food ingredient manufacturer from Mumbai, a textile giant, and a Chennai-based conglomerate that’s into manufacturing and distribution of agricultural commodities,” said Sivarajan Subramanian, associate vice president for Ramco ERP Software at Ramco Systems.

Such deals may be seen as part of a broader trend of domestic vendors winning higher-profile enterprise workloads.

Beyond rhetoric

Industry observers suggest that the government’s push represents a meaningful move that could effectively go beyond symbolic efforts to promote the adoption of indigenous enterprise solutions.

India has, for long, contributed to global product development for both domestic and international OEMs.

“While the transition away from global players may not happen overnight, this initiative lays the groundwork for Indian product companies to gradually gain greater mindshare and market share, both within the country and globally,” said Sharath Srinivasamurthy, research vice president at IDC.

Subramanian pointed out that initiatives like the Digital MSME Scheme, which subsidizes IT adoption for smaller enterprises, and recognition for GST-compliant (India’s nationwide indirect tax system) solutions are giving local ERP vendors a stronger foothold against global rivals.

Weighing value and reliability

Zoho believes a shift is already underway. “We do anticipate a gradual but meaningful shift among Indian enterprises and government agencies as they re-evaluate their reliance on global providers,” Singh said, adding that the three key drivers are value, faster time-to-value, and local support with long-term affordability.

Subramanian said that local ERP solutions could offer competitive pricing compared to global providers, making them attractive to Indian enterprises. “Indian-built ERPs are more likely to be tailored to local regulations, labor laws, and industry-specific compliance requirements.”

Analysts broadly agree, noting that Indian firms are increasingly capable of supporting enterprise-grade workloads.

“Indian software vendors have developed the capability to manage mission-critical deployments, having matured into enterprise-grade solution providers,” Srinivasamurthy said. “While they have traditionally been favored by SMBs, these vendors are now making focused efforts to enhance their products and cater to the enterprise market. And they are beginning to see early success in this transformation.”

Meanwhile, the next battleground is likely to be data policy and compliance.

“If India pursues a path of digital sovereignty, global vendors will be forced to store data in India, which means they have to invest more in the country,” Srinivasamurthy added. “Initially, Indian software vendors will have an advantage, but over time, if global vendors are able to comply, the market will get very competitive.”

Potential policy-driven competition ahead

For multinational incumbents like Microsoft, Oracle, and SAP, these developments raise questions about how much market share they risk losing and how quickly they can adapt to policy-driven changes in India.

Many have already invested heavily in Indian data centers, cloud infrastructure, and local partnerships, moves that could help them retain large enterprise customers even as procurement rules and digital sovereignty initiatives favor domestic vendors.

The balance of power will depend on how aggressively Indian firms can scale up their support and reliability, and whether global players adapt quickly enough to hold their ground.

Either way, policy and local innovation have begun reshaping enterprise software strategies in India, a shift that could shape the market for years to come.