Article · 18 min read

Make in India: Demystifying the Applicability of Procurement Orders to Software Products

Nishith Desai Associates · Nishith Desai Associates (Technology Law Hotline) Free Advanced India

Hardware founders have a clear MeitY component-by-component local-content formula; software founders have almost nothing, and this piece fills that exact gap. It works four real business models (one-time territorial IP assignment, per-product royalty, licensing, and reseller) through the local-content math with a worked example: on a Rs 1,00,000 software license, offshore royalties must stay under Rs 50,000 to hit Class-I. It shows you how to structure IP so you actually clear the bar instead of guessing.

  • Software local content is measured off offshore royalties as a share of the quoted price, so on a Rs 1,00,000 license, keep offshore royalties under Rs 50,000 for Class-I and under Rs 80,000 for Class-II
  • A pure reseller model almost always fails to qualify, while a one-time territorial IP assignment can read as 100% local, so your contract structure decides eligibility
  • MeitY has hardware and cyber-security notifications but no software-specific local-content guidance, so get pre-tender clarification from the buyer and auditor-certify your calculation
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The question it answers

  1. Do I need to manufacture in India or hit local-content rules to sell hardware or software to the government?

Read with it

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