How much does custom software cost in India

Quick answer

The cost of custom software in India is the number of hours the work needs multiplied by the hourly rate, plus third party items such as hosting, paid APIs and app store fees. Rates across the market vary widely, so the most useful thing you can control is a clear scope that keeps the hours predictable. At 2good's Prime rate of INR 199 an hour, a 150 hour block costs INR 29,850 before tax, and most MSME ERPs land between 600 and 1,200 hours, roughly INR 1.2 to 2.4 lakh.

What drives the cost

Every software estimate, however it is presented, is built from hours. A fixed quote, a monthly retainer and an hourly invoice all start from someone's view of how long the work will take. The rate matters, and the hours matter more, because a change in scope can double the hours while the rate stays the same.

Four things move the hours more than anything else.

Scope

Scope is the list of things the software must do. A job card system for a Rajkot engineering firm that records jobs, assigns them to machines and prints a delivery note is a modest piece of work. Add stock control, purchase orders, costing per job and a customer portal, and the same system is several times larger. Each screen, report and rule takes time to design, build and test.

The most common reason estimates grow is scope that was never written down. Two people can read "manage orders" and picture very different things. A written specification, even a short one, is the cheapest way to keep a budget honest. The specification starter gives you a structure to begin with.

Roles and seniority

A project needs more than developers. Someone has to review the design and the code, someone has to test it, and someone has to plan the work and keep you informed. Senior people cost more per hour and save hours by making good decisions early. Work with heavy architecture choices, legacy systems or business critical data needs a larger share of senior time.

At 2good this is what the tiers express. Prime suits an MVP with a clear scope, features on an existing codebase or maintenance. Plus suits integration heavy work, scaling and migrations. Pro suits business critical builds that need senior led delivery. Senior review, testing and project management are included in every tier.

Integrations

Connecting to other systems is often where hours hide. Linking to Tally, a payment gateway, a courier API, WhatsApp Business messaging or a government portal means reading documentation, handling errors, testing with real accounts and coping with services that behave differently from their documents. A system that stands alone is cheaper than one that exchanges data with five others.

Platforms

A web application that works well on a phone browser is usually the lightest option. A native Android app adds a build, and an iOS app adds another, along with store review and device testing. If you need web, Android and iOS from day one, budget for it. Many businesses start with a web app and a single mobile platform, then add the second once the first has proved its value.

How hourly and block pricing work

Hourly pricing

With hourly pricing you pay for the time spent. It is simple and flexible, and it puts the estimating risk on you: if the work takes longer, you pay more. Hourly pricing works best when you can see clearly what each hour produced.

Block pricing

A block is a fixed bundle of hours bought as one unit. At 2good the block is 150 hours, which is also the minimum engagement. Each block has a planned mix of roles, so a Prime block includes developer time along with senior review, testing and project management hours. Each block also carries a USD 50 AI tool budget, which covers AI coding assistants, AI assisted testing and API usage for AI assisted delivery.

| Tier | Hourly rate | 150 hour block | With AI tool budget | |---|---|---|---| | Prime | USD 2 or INR 199 | USD 300 or INR 29,850 | USD 350 | | Plus | USD 5 (INR on request) | USD 750 | USD 800 | | Pro | USD 10 (INR on request) | USD 1,500 | USD 1,550 |

All figures are before tax. You can change tier from one block to the next, so a project can start with a Plus block for the design decisions and continue on Prime once the direction is set.

Payment follows acceptance. Each block is built against a signed Statement of Work that says what done means, you test the result, and you pay after you accept it. There is no advance. Pay after acceptance sets out the process in full.

Worked examples

The examples below use the published rates. Your own hours depend on your specification, and the MVP hours estimator gives a first view before you talk to anyone.

A small, well defined piece of work: 150 hours

A clinic chain in Ahmedabad wants WhatsApp appointment booking linked to its existing calendar, with a simple dashboard for front desk staff. The scope is narrow and the integrations are known. One Prime block covers it.

• 150 hours at INR 199: INR 29,850 before tax
• In US dollars: USD 300, plus the USD 50 AI tool budget

An MVP: 150 hours

A Pune founder wants a first version of a booking marketplace: customer sign up, provider listings, search, booking, payments and an admin panel, on the web with a mobile friendly layout. With AI doing much of the routine build, a focused first version fits in one block.

• 150 hours at Prime: INR 29,850 or USD 300 before tax, plus the USD 50 AI tool budget
• The same hours at Plus: USD 750, plus the USD 50 AI tool budget

Where the data model and payment flow need more senior attention, the block can run on Plus.

An MSME ERP: 600 to 1,200 hours

A manufacturer wants to move sales orders, purchase, inventory, production planning and dispatch out of spreadsheets, with GST invoices and a Tally link. Most MSME ERPs land between 600 and 1,200 hours.

• 600 hours at INR 199: INR 1,19,400, roughly INR 1.2 lakh, across four blocks
• 1,200 hours at INR 199: INR 2,38,800, roughly INR 2.4 lakh, across eight blocks

Where you fall in that range depends on the number of modules, how many reports and approval rules you need, how clean your existing data is, and how many systems the ERP must talk to. Work of this size is usually delivered in stages, so the core modules go live and earn their keep while later modules are built.

What sits outside the hourly rate

The hourly rate pays for people's time. Some costs belong to third parties and are paid whichever company builds the software. The usual ones are:

• Hosting and cloud services: servers, databases, storage and backups
• Paid APIs: SMS, WhatsApp Business messaging, maps, payment gateway fees, AI model usage in the live product
• Licences: paid libraries, fonts, design assets or commercial software the system depends on
• Store fees: developer accounts for the Google Play Store and the Apple App Store
• Domains and email: domain registration, SSL certificates where they are paid, business email

Who pays for each of these, and in whose name the accounts are opened, is agreed in writing before work starts. Ask for the accounts to sit in your company's name wherever possible, so you hold the keys to your own product.

GST and tax

Prices are quoted before tax. For clients in India, GST generally applies to software development services and is shown on the invoice, and a GST registered business can usually claim input tax credit on it. For clients outside India, the supply may qualify as an export of services under the GST law, which has its own conditions about payment and documentation. TDS may also apply to payments made by Indian businesses.

Tax treatment depends on your registration and the facts of the supply, so confirm it with your CA.

How to get a reliable number

A useful estimate needs three things from you: a description of the users and what each of them does, a list of the systems the software must connect to, and the platforms you need. With those, a vendor can give a range in hours, and the range narrows as the specification firms up.

Start with the MVP hours estimator for a first figure, write your outline with the specification starter, and see the full rates on the pricing page. When you are ready to talk it through, contact us and we will turn your outline into a Statement of Work with hours you can check.