Center to ease procurement rules for Indian tech companies

With the aim to uplift home-grown software product companies, in line with the government's "Atma Nirbhar Bharat" (self-reliant India) scheme, the Ministry of Electronics and IT have facilitated a proposal to ease procurement norms.

The proposal is expected to help Indian software companies secure more technology projects from the central and state governments.

According to a top government official, a government committee is drafting a model Request for Proposal (RFE) document for software products which will soften eligibility conditions such as revenue and work experience thresholds, need for third-party certifications and easier payment norms for Indian software products.

The committee headed by IIT-Bombay's DP Pathak includes government officials as well as members from industry associations such as Nasscom and iSPIRT.

A similar model RFP, to ease procurement of software services by various government bodies, was released previously.

The move to promote India-based products is a welcome step, said Raju Vegesna, Chief Evangelist, Zoho Corp.

"The government recently announced a grant for a local company to build a video conferencing tool, that's a good initiative," he said.

Zoho is among the companies shortlisted in the first round by the government to build the video conferencing tool.

The model RFP document is likely to be ready within a month and the Centre will work with states to adopt it as a best-practice since such procurement norms cannot be binding on states.

"Even Indian service providers offer products from companies like Microsoft and Oracle when they bid for government contracts; if the departments start considering Indian products which match the quality of foreign companies but may lack the required experience, then it will be a big fillip to the Indian software products industry," the government official added.

The government will also devise a way to facilitate recurring monthly payments, considering that most payment companies are based on a Software as a Service (SaaS) model.

Sparsh Gupta, co-founder and CEO of SaaS firm Wingify said, "Since Indian companies have to compete with global firms, they have to match their product features with those firms. Once India offers a larger market, this could change".

The Indian software product industry has so far remained in the shadows of the more successful services industry and the government has been trying to give it a boost through various initiatives under the Indian Software Products policy, which was cleared in February 2019.