A custom software build in India usually costs ₹2 lakh to ₹20 lakh, and the realistic middle for a first working system used by one team inside one company is ₹4 lakh to ₹9 lakh. Anything quoted under ₹1 lakh is normally a template with your logo on it, or one junior developer working alone with no testing. The range is that wide because custom software is not a product with a price tag — it is a count of screens, rules, integrations and person-days, and nobody can price it honestly until somebody has counted.
Why the same brief gets quoted at ₹80,000 and at ₹20 lakh
Send “we need software to manage our orders” to five Indian vendors and you will get five different systems priced. One reads it as a six-screen internal tracker. Another reads it as multi-user roles, an approval chain, GST invoices, a Tally sync, a customer login and a delivery app. Both are answering your sentence correctly. The gap sits in your brief, not in their honesty.
Four other things move the number:
- Who actually writes the code. A three-year developer and a ten-year developer are not the same line item, and the senior one usually finishes a hard module in a third of the time.
- Whether testing, deployment and project management are priced at all. Cheap quotes normally drop QA and DevOps, then return the bill later as “bugs”.
- The integration count. Each external system — Tally, Zoho, a GST e-invoice provider, a payment gateway, a courier API, WhatsApp — adds days nobody can see in a demo.
- Where the vendor plans to earn. Some firms quote the build near cost and make their margin on a long maintenance contract. That is a fair model, but ask for the maintenance price before you compare build prices.
How effort is actually estimated
A serious estimate is arithmetic, not a feeling. Screens and user stories are listed, each is sized in person-days per role, then QA (about 20–25% of development), project management (10–15%) and a contingency of around 15% are added. Multiply by a day rate and you get a number you can argue with. If a vendor cannot show you that breakdown, they have guessed and you are paying for the guess.
Day rates across the Indian market, for an eight-hour day:
| Role | Day rate in India | Share of a typical build |
|---|---|---|
| Business analyst / product | ₹4,000 – ₹12,000 | 5–10% |
| UI/UX designer | ₹3,500 – ₹10,000 | 8–12% |
| Backend developer | ₹4,000 – ₹14,000 | 30–40% |
| Frontend developer | ₹3,500 – ₹12,000 | 20–30% |
| QA / tester | ₹2,500 – ₹7,000 | 10–15% |
| DevOps (part-time) | ₹5,000 – ₹15,000 | 3–6% |
| Project manager | ₹4,000 – ₹12,000 | 10–15% |
A worked example. A sales CRM for a 25-person team — lead capture from a website and WhatsApp, a pipeline board, quotations with GST, follow-up reminders, role-based access and four reports — lands at roughly 95 person-days: 5 discovery, 10 design, 34 backend, 26 frontend, 12 QA, 8 project management. At a blended ₹5,000 a day that is about ₹4.75 lakh. At ₹9,000 a day it is about ₹8.5 lakh. Same scope, different team, and both quotes can be honest.
The paid discovery sprint, and when to skip it
Nobody can give a fixed price for a system that has never been specified. The way around it is a paid discovery sprint: one to two weeks of interviews with the people who will use the software, a screen-by-screen scope, wireframes, an integration list, a data-migration plan and a fixed quote with its assumptions written down. Market price in India runs from ₹40,000 to ₹1.5 lakh.
Two honest warnings. Discovery is only worth paying for above roughly ₹3 lakh of build; below that you are spending a quarter of the budget on paperwork, so ask for a two-page scope note instead. And a discovery document written by the firm that then bids for the build is not neutral. You are entitled to take that document to another vendor for a second quote, and a vendor who will not hand it over has told you something useful.
Typical cost bands by system type
| System | What it usually includes | Person-days | Typical price in India |
|---|---|---|---|
| Internal CRM | Leads, pipeline, quotations, reminders, role access, reports | 70–110 | ₹3 lakh – ₹9 lakh |
| Customer or dealer portal | Login, orders, ledgers, documents, downloads | 50–90 | ₹2 lakh – ₹7 lakh |
| Inventory and GST billing | Stock, purchase, invoicing, e-way support, Tally export | 90–150 | ₹4 lakh – ₹12 lakh |
| Field or delivery operations (web plus app) | Job assignment, routing, proof of delivery, offline capture | 120–200 | ₹6 lakh – ₹18 lakh |
| SaaS MVP | Multi-tenant, subscriptions on Razorpay with UPI autopay, admin console, usage limits | 90–160 | ₹3.5 lakh – ₹15 lakh |
| Multi-module ERP replacement | Finance, inventory, HR and production across departments | 250+ | ₹15 lakh and up |
The last row carries a warning: an ERP replacement on a ₹10 lakh budget fails more often than it succeeds, usually at data migration and training rather than at code. Replace one module at a time.
So you can place us on that scale: our discovery sprint is ₹49,999, custom software business applications start at ₹1,49,999, a SaaS MVP starts at ₹3,49,999, and a dedicated developer is ₹60,000 a month. All figures exclude 18% GST, and every milestone is invoiced with GST so a registered buyer can claim input credit.
When custom software is the wrong answer
We have told people to buy a product instead of hiring us, and it was the right call each time. Zoho CRM, Vyapar, Marg, Busy and Tally already cover a large share of what Indian businesses ask us to build, at a few hundred to a few thousand rupees per user per month. If a ready product handles 80% of your flow, buy it and change your process for the other 20%. You will be live next week for the price of one month of development.
Build custom when the process is the reason you win business and no product matches it, when licence costs for 80 or more users exceed a build over three years, when you need data your product will not export, or when the software itself is what you sell. A founder still testing an idea is better served by a landing page and a manual back office than by a ₹5 lakh build — see startup websites. And if what you actually need is a public site with a lead form, that is web development in India at a far smaller budget.
Fixed price, time and material, or a dedicated team
Fixed price
Works when the scope is written down to the screen. You get a number and a date. The cost is that the vendor prices the risk: expect 15–30% padding, and expect every change to become a change request. Agree the change-request rate in writing before you sign — a per-day figure, not “we will discuss it later”.
Time and material
You pay for days actually worked, invoiced fortnightly against a timesheet. It is cheaper when the scope will move, which it does as soon as real users touch the software. The risk sits with you, so cap it: a not-to-exceed figure per sprint, and the right to stop at the end of any sprint with the code already in your repository.
Dedicated developer or team
A monthly rate for people who work only on your product, ranging from ₹60,000 to about ₹2.5 lakh per person per month in India depending on seniority. It suits a product with a roadmap that will not end. It is the worst choice if nobody on your side decides what gets built each week; you will simply pay for idle capacity.
Source code and IP: what the contract must say
Assume none of this is standard, because it is not. Under Indian copyright law the author owns the code unless there is a written assignment, so a line in an e-mail saying the client owns the software is not enough. Five clauses to insist on:
- Written assignment of copyright in the custom code to your company, effective on payment of each milestone — an assignment, not a perpetual licence.
- Repository access from day one. The GitHub or GitLab organisation should be in your company’s name with you as owner and the vendor as a member. Code you cannot see is code you do not own in practice.
- Named third-party components. A list of open-source libraries and paid licences with their terms, so a per-server licence does not surface at go-live.
- Accounts in your name. Domain, cloud, database, payment gateway, analytics and app store, created with your e-mail and your billing. We do this as a rule; it costs us nothing except the ability to hold anyone hostage.
- Data export on demand and reuse boundaries. A full database dump in a standard format within a stated number of days, at any time, including after the contract ends. On reuse, be realistic: every firm reuses generic blocks such as authentication and invoicing helpers. What must never be reused is your business logic, your data or your workflows — write that distinction in rather than a blanket ban you cannot police.
The costs that never appear in the build quote
- Servers. A small business application runs on ₹1,500 to ₹6,000 a month. Add backups, a staging server and a managed database and ₹10,000 to ₹25,000 a month is normal once you have real users.
- Third-party usage. Payment gateway at roughly 2% plus GST per transaction, WhatsApp Business API billed per conversation by Meta, SMS with a one-time DLT registration and a per-message charge, maps and e-invoice providers on their own meters. These bill you directly, permanently.
- Data migration. Moving ten years of Excel and Tally data into a clean schema is usually 5 to 15 person-days, and it is the single most common reason a launch slips. Ask for it as a separate line item.
- Maintenance. Budget 15–20% of the build cost per year for fixes, library updates and small changes.
- Store fees if part of the system ships as a mobile app — a one-time Google Play fee, an annual Apple fee and review time, covered in app development.
- Your own people’s time. The largest uncosted item. Expect to give 3–5 hours a week to reviews and decisions, and considerably more during migration and training.
- 18% GST on every invoice, claimable as input credit if your company is registered.
Eight checks before you sign
- Ask for the estimate split by role and person-days, not one lump figure.
- Ask what happens when a screen takes three days instead of one — who absorbs it, and at what rate.
- Ask for a working URL at the end of every sprint. A recorded demo is not a deliverable.
- Ask who owns the repository on day one, in writing.
- Ask which third-party services will bill you directly, and at what rates.
- Ask for the maintenance price at the same time as the build price, not after launch.
- Ask for one reference whose system has been live for more than a year. Software ages; a fresh launch proves less.
- Ask what the exit looks like — handover, documentation, credentials, and how many days it takes.
The short version
- ₹4 lakh to ₹9 lakh buys a real internal system for one team. Under ₹1 lakh buys a template or a lone junior.
- Price is person-days multiplied by a day rate, so demand the day breakdown by role before you compare quotes.
- Pay for a short discovery sprint before any fixed quote above roughly ₹3 lakh; below that a two-page scope note is enough.
- Get copyright assignment, repository ownership and every account in your company’s name, or you have rented your software rather than bought it.
- Add servers, third-party meters, data migration and 15–20% a year maintenance before you decide which quote is cheaper.
Frequently asked questions
How much does custom software development cost in India?
Between ₹2 lakh and ₹20 lakh for most business systems, with ₹4 lakh to ₹9 lakh being the realistic middle for a first system used by one team — a CRM, a portal, or an inventory and billing tool. The price follows person-days multiplied by a role day rate of roughly ₹2,500 to ₹14,000. Anything under ₹1 lakh is usually a template or one junior developer with no testing.
Why should I pay for a discovery sprint before getting a fixed quote?
Because a fixed price for an unspecified system is a guess, and the vendor prices that guess with 15–30% padding. A discovery sprint produces a screen-by-screen scope, wireframes, an integration list and a data-migration plan, so the quote becomes something you can argue with. Market price in India is ₹40,000 to ₹1.5 lakh. Below roughly ₹3 lakh of build, skip it and ask for a two-page scope note instead.
Is fixed price or time and material safer for the buyer?
Fixed price is safer when the scope is written down to the screen and will not move; you get a number and a date, and you pay for the vendor’s risk in the padding. Time and material costs less when the scope will change after real users see the software, which it usually does. Cap it with a not-to-exceed figure per sprint and the right to stop at any sprint boundary with the code in your repository.
Do I own the source code of custom software built for me?
Only if the contract says so. Under Indian copyright law the developer owns the code unless there is a written assignment, so insist on assignment of copyright in the custom code to your company on payment of each milestone. Take ownership of the Git repository from day one, keep domain, cloud and gateway accounts in your company’s name, and add a clause for a full database export on demand.
What are the ongoing costs after the software is delivered?
Servers from ₹1,500 a month for a small application, rising to ₹10,000–₹25,000 once you have real users, backups and a staging copy. Third-party meters bill you directly: payment gateway at about 2% plus GST, WhatsApp conversations, SMS with DLT registration, maps and e-invoice providers. Budget 15–20% of the build cost per year for maintenance, plus 18% GST on invoices, claimable if you are registered.
