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India has never had more developers. Yet, capital for the earliest stage of building new technology companies is shrinking. Recently released Tracxn data reveals that in the first nine months of 2026, seed funding fell 37 per cent to $698 million, even as early-stage funding rose 27 per cent to $4.2 billion. This follows a 30 per cent decline in seed funding in 2025.

That is striking at a time when India’s technology talent base has never been larger. GitHub estimates that India had 21.9 million developers in 2025, up from 4.5 million in 2020. It added more than 5 million in just one year. India now has the world’s largest base of contributors to public and open-source repositories. AI, cybersecurity, engineering, analytics and product development sit alongside traditional software-services work.

The first is jobs and salaries. India clearly captures this. The technology industry employs about 5.8 million people. GCCs alone now employ about 2.36 million, and export revenues are roughly evenly split between Indian service providers and global MNCs, including GCCs. The second is profits and enterprise value. A substantial part of this also stays in India. Indian IT companies sell technology services globally and capture the margins, profits and enterprise value here.

The third is high-value work and expertise. GCCs that once handled mainly support increasingly house product engineering, AI, architecture, R&D and end-to-end responsibility for global platforms. That brings better-paid roles, deeper expertise and stronger technology ecosystems into India. And then the fourth layer — products, IP and ownership. Who owns the products and platforms being created? Who receives the recurring revenues and long-term enterprise value?

Here, India still has some way to go. NASSCOM estimates that software products account for only about $16.1 billion of India’s $282.6 billion technology industry. India remains much stronger in technology services and global delivery than in building and owning globally scaled software products and platforms.

The move from talent to services to high-value capability has already happened to a remarkable extent. Ownership remains thin. This is where the funding numbers become relevant. The fall in seed funding, alongside rising funding for companies that have already demonstrated traction, suggests that capital is becoming more selective. That may be rational from an investor’s perspective. But product ownership is often created earlier — when the idea is still unproven, failure rates are high and someone has to fund conviction before there is evidence.

A talented architect or engineering manager in Bengaluru today has more options than at any previous point in India’s technology history: An Indian IT company, a global product company, a GCC doing sophisticated work, or a start-up trying to build something of its own. The risk-reward equation across those choices is very different. GCCs can offer high salaries, global work and increasingly attractive career paths. Start-ups offer the possibility of ownership, but also much greater uncertainty. If capital becomes harder to access precisely when founders are trying to turn ideas into products, India’s path from capability to ownership becomes more difficult.

India has invested substantially in innovation infrastructure: research centres, incubators, public funding programmes and R&D facilities. But infrastructure and technical capability cannot substitute for capital willing to accept early failure.

This is not an argument for indiscriminate start-up funding. Most early ideas will fail, and capital should remain disciplined. But if India wants more of its technology talent to create products, IP and enterprise value that are owned here, it needs sufficiently deep pools of risk capital that can back ideas before the evidence is overwhelming.

India has built the talent. It has built globally competitive services companies. It has become indispensable to the technology operations of many of the world’s largest corporations. The next transition is harder: From building technology for the world to owning more of what gets built.

With AI entering the picture, it’s unknown whether we need more developers or fewer. But the technology race now goes well beyond having the most developers. It is increasingly about who owns what those developers build.