In 2000, as I started my tech journalism career, everyone asked, "When will India have its own Google or Microsoft?" At the time, India's IT industry, then a robust but unglamorous sector worth $5 billion, was just beginning to emerge as the world's back office.
Zoho and Tally stood out in that period. They were the exceptions, the few names that came up whenever there were discussions about India's role in software product innovation. Hearing these names over and over again felt like listening to a broken record.
Quietly and steadily, a generation of software product companies led by Zoho and Tally grew in the shadows of the multi-billion-dollar software services industry, providing a resounding answer to this question: Today, India's SaaS and software products ecosystem is not just a sector but a growing community of founders committed to the Product Nation mission. From Delhi to Bengaluru, from Indore and Bhopal to Surat and Mumbai, this vibrant community is the driving force behind the 'new makers of India'.
From Back Office To Front Runner
Today, India's IT sector is a $250 billion powerhouse, though it mostly comprises software services. India's evolution into a software Product Nation has catalysed the emergence of thousands of SaaS companies, which now deliver software products to various clients, from local salons in the US to major global corporations like Tesla and Walmart.
Zoho, Freshworks, Icertis, Capillary, BrowserStack, Zenoti, and Wingify are leading the charge in the software product space. Freshworks, a Chennai-born SaaS company, celebrated its NASDAQ debut in 2021, marking India's firm place on the global software map. According to the SaaSBoomi-McKinsey report, the Indian SaaS ecosystem may be able to generate $50 billion in revenue by 2030.
This monumental shift in software begs a critical question: Why do we lag in hardware? If we can excel in creating software that the world depends on, why can't we mirror that success in hardware?
Over a decade ago, Sharad Sharma of iSPIRT, Avinash Raghava of SaaSBoomi, and Girish Mathrubootham of Freshworks discussed a broader vision - not just software but transforming India into a Product Nation. They shaped this dream alongside Sangeeta Gupta at NASSCOM and founders like Bharat Goenka of Tally.
This dream now requires a new chapter focused on hardware and electronics.
The Missing Link: India's Hardware Challenge
India's electronics sector thrived in the 1980s and 90s, but we've fallen behind today. Why? A glaring lack of a robust design ecosystem and insufficient emphasis on homegrown innovation are to blame.
Consider the ITA-1 policy from 1997, which removed duties on imported finished products but retained them for components, effectively stifling domestic manufacturing. By 2023, foreign brands captured over 75% of our smartphone market, while local brands dwindled.
Despite a $115 billion boost from government initiatives, the essential ingredients - design and innovation - are still missing. Venture capital that floods e-commerce and fintech bypasses electronics and semiconductors, sectors that desperately need patient, enduring investment.
What about our talent pool? Our institutions are churning graduates primed for service roles, rather than the innovators we urgently need. Many engineers, even those at MNCs, only witness part of the product development lifecycle.
Can We Afford To Continue On This Path?
Despite the significant challenges facing India's hardware and electronics sector, not everything is grim. The journey of Tejas Networks stands out. Founded by Sanjay Nayak, Tejas Networks faced early doubts and numerous obstacles. However, Nayak's unwavering determination has driven the company to an impressive market cap of Rs 22,000 crore. This success highlights the potential of India's hardware sector and shows that with the right leadership and determination, Indian companies can achieve remarkable heights and compete globally.
As we progress in software, let's ignite a similar revolution in hardware. Only then will India truly manifest its destiny as a Product Nation - by not just participating in the global tech race but leading it with products that the world depends on.
Turning this ship around requires more than tweaks to policy; it demands a complete overhaul of how we value and promote innovation. We must start from the ground up, transforming India into a market and a maker-a true Product Nation.
(Pankaj Mishra has been a journalist for over two decades and is the co-founder of FactorDaily.)
Disclaimer: These are the personal opinions of the author