Is ₹6 Lakh for 875 Hours a Fair App Development Quote in India?

The quotation runs two pages. Feature list, phase names, a timeline, and at the bottom one figure: roughly ₹6,00,000 for about 875 hours of work. It looks thorough. And you have no idea whether it is a bargain or a stitch-up, because nothing has ever taught you what an hour of app development costs in India.

Divide before anything else. ₹6,00,000 over 875 hours is ₹685 an hour. That single number tells you more about what you are buying than the whole feature list does.

An hours-based quotation is only as meaningful as the implied hourly rate and the completeness of the scope. Divide the total by the hours, then interrogate the rate and the omissions. The total is the least informative figure on the page.

Direct answer: ₹685 an hour is a real, live rate in India, low for an established agency and normal for a small firm or a tier-2 city team. Not a scam price. Whether ₹6 lakh is cheap or expensive turns on two things, neither of which is the rate: whether 875 hours is honest, and whether the scope includes the dozen items Indian app quotes routinely omit.

Divide first: what ₹685 an hour actually buys

Turn the rate into shapes you can reason about. An eight-hour day costs about ₹5,485. A 160-hour month of one person’s billed time is about ₹1,09,700. And 875 hours is roughly 109 working days: five and a half person-months of one engineer, or just under three months of two people in parallel.

Now run the vendor’s side, because it decides who sits at the keyboard. No salary figures needed, just the formula.

Not every paid hour is a billed hour. Leave, holidays, internal meetings, pre-sales calls, bench time and rework all come out of the same salary. State your own assumption: at 1,400 billable hours a year and ₹685 an hour, one engineer generates about ₹9.6 lakh of revenue annually. At 1,600 hours, about ₹11 lakh. That is an assumption, not a published statistic, and say so when you use it.
Salary is not the employer’s cost. On top of gross pay sit the employer’s provident fund contribution under the EPF & Miscellaneous Provisions Act, ESI where the establishment and wage band are covered, gratuity accruing from day one, insurance and payroll administration. None optional, none visible in an offer letter.
Then subtract everyone who is not the engineer. A project manager, a tester, laptops, licences, rent, a founder doing sales, and margin. In a small Indian agency, commonly a third to a half of the recovered rate.

Take the ₹9.6 lakh, strip the non-engineering share, and compare what is left against the fully loaded annual cost of the person you want writing your app. For a senior in Bengaluru, Pune or Gurugram the sum does not close. For a two-to-four-year engineer in Indore, Coimbatore, Kochi or Jaipur, with a PM and a tester shared across three projects, it closes comfortably. So ₹685 buys competent mid-level execution with thin senior supervision. It does not buy an architect who has shipped this category before and will tell you which two features to delete.

One counter-intuitive point. Padding the hours makes the rate look better. ₹6 lakh over 875 hours reads as a comfortable ₹685. The same ₹6 lakh for the same app in 500 genuinely-needed hours reads as ₹1,200, and is probably the better buy, because it implies people who have built this before.

Is 875 hours even the right number?

Here is the test that separates an estimate from a price in an estimate’s clothing. Ask for the 875 broken down to screen and module level, with lines that sum to 875. A team that estimated bottom-up sends it within a day, because the spreadsheet exists already. A team that picked ₹6 lakh and divided backwards offers phase totals: “Design 120, Development 560, Testing 110, PM 85.” That is one round number cut into four, not a decomposition.

While you wait, build your own count.

Count unique screens, not instances. A product list, a product detail page and a search result are three screens. Forty products are still one detail screen.
Count states per screen. The step founders never do, and where estimates die. Every real screen has to handle loading, loaded, empty (no orders yet, no results), error, offline and permission-denied. A screen is often four to six things to build and six to test. If per-screen hours look uniform, someone counted layouts.
Count integrations, each as its own mini-project. Payment gateway, SMS or WhatsApp OTP, maps, push, analytics, crash reporting, transactional email, any KYC upload. Each has credentials, sandbox testing, failure handling and a support thread with the provider.
Add the invisible work. Authentication is not one screen: sign-up, login, forgot password, OTP resend and rate limiting, session expiry, logout, and an in-app account deletion path, which Google Play requires of apps that let users create accounts. Roles and permissions if there are two kinds of user. Push plumbing, which needs a backend and a way for you to send one. Analytics events someone defines. An admin panel, because at 10pm you will want to refund a customer without phoning your developer. Data migration if anything lives in Excel today. Store submission, screenshots, listing copy, privacy declarations, and the back-and-forth when review says no. And QA on the cheap Android handsets your users actually own, not the vendor’s iPhone and an emulator.

The lines missing from almost every Indian app quotation

These turn ₹6 lakh into ₹8.5 lakh over six months, one polite email at a time. Ask about each in writing.

Backend and hosting setup, and who pays monthly. Provisioning, database, environments, deployment, domain, SSL. Then the recurring cloud bill forever, in your own account from day one.
Third-party running costs. Gateway onboarding and per-transaction charges, SMS or WhatsApp priced per message, maps usage above the free tier, crash tooling. Small individually, a real line together.
Store accounts, in your name. Apple’s Developer Program is a published $99 annual membership. Google Play charges a US$25 one-time registration fee and may ask for a valid government ID and a credit card in your legal name. Enrol both as your company, and if the Play account is a new personal one, plan for the closed-testing requirement before production access.
Post-launch bug fixing versus paid maintenance. Define how long the free warranty runs, what counts as a bug rather than a change request, and who decides. Without that third clause the second is decorative. Maintenance is not optional either, because the platforms force it: Google requires new apps and updates to target Android 16 (API level 36), and from 31 August 2026 existing apps must target API level 35 or higher to stay available to new users on newer devices.
Design, if the quote says development. UI design, a round or two of revisions, app icon, splash screen, store screenshots. No design line and no Figma file mentioned means someone designs as they code.
Source code handover. Repository, environment configuration, a README another team can run the project from, and the design files. A deliverable. Name it.

GST, TDS, and why a quote without a tax position is incomplete

General information, not tax advice. A quotation that says “₹6,00,000” and nothing else is incomplete, because GST on services is charged on top of the fee unless the document says the figure is inclusive. Whether that extra hurts depends on you: a GST-registered business using the app for its own business purposes can generally claim the tax charged as input tax credit, subject to conditions, so the effective cost sits near the base fee. An unregistered founder pays all of it. A vendor below the registration threshold cannot charge GST at all, and one charging it without a valid registration is a problem to find now rather than at audit. Check the GSTIN on the Search Taxpayer facility on the official GST portal: registration active, legal name matching the entity on the quote and the bank account you are about to pay.

The other half is your obligation. If your entity must deduct tax at source on payments for professional or technical services, the vendor receives less than the invoice value and needs to know before the first instalment, not after. Settle it in one contract sentence and check the current position at incometax.gov.in.

Fixed price, time and materials, or a dedicated team: who pays for hour 876?

Your quote is a hybrid, and that ambiguity is the risk. ₹6,00,000 with 875 hours attached needs exactly one clarifying question, and that is it.

Fixed price. ₹6 lakh for a defined scope; the hours are the vendor’s internal working. They carry the estimation risk, so they buffer it and defend the scope boundary hard, and change requests become the profit centre. Right when scope is frozen at screen level, wrong when it is not.
Time and materials. You pay ₹685 plus tax per hour worked and 875 is a forecast. You carry the estimation risk. Sign only with a not-to-exceed cap needing your written approval to breach, weekly task-level timesheets, and the right to stop at any milestone.
Dedicated team. A monthly fee per named person. Lowest effective rate, and you carry both estimation and utilisation risk, because idle time still bills. Works only if you can direct engineers daily. Most first-time founders cannot, and pay a lakh a head for people waiting on instructions.

A low fixed price is not automatically in your favour. If 875 is a serious underestimate, the vendor discovers around hour 700 that finishing properly means working for nothing. Nobody works for nothing. They cut the invisible things first: QA, error states, edge cases, the admin panel. Too cheap, on a fixed price, is a quality risk rather than a discount.

Milestones, ownership, and the accounts

Staging the money

Opinion, and defensible: on a first engagement pay no more than about 30% up front, tie every later payment to something you can personally verify, and hold the final 10% to 15% until acceptance after launch. Verifiable means a build on your own phone, or a staging login. “Backend 80% complete” is a feeling, not a milestone. Write acceptance criteria in buyer language first: I can register with an OTP, add two items, pay with a test card, and see the order in the admin panel.

Who owns the code

General information rather than legal advice, and worth twenty minutes of a lawyer’s time at this spend. Do not assume that paying for software makes you its owner under Indian law. A vendor is not your employee, and copyright in what they write does not pass to you merely because you paid the invoice. You need an express written assignment of all intellectual property in the deliverables to your company, covering code, designs and documentation, effective on creation rather than on final payment. Copyright assignments in India carry formal requirements about being in writing and identifying the rights, duration and territory, with statutory defaults where the document is silent, so have the clause drafted, not copied from a template. Add a non-infringement warranty and a disclosure of third-party and open-source components with their licences.

Who owns the accounts

Owning the code is useless without owning where it lives. Before the first line is written, create these in your company’s name and invite the vendor in: the Git organisation, the cloud account, the Firebase or equivalent project, both developer accounts, the domain registrar, the gateway account, the analytics property. Free on day one, near impossible to unwind the day a relationship ends badly.

Verify the vendor with public records

You are about to wire ₹6 lakh to an entity you met online. All of this is free.

Company or LLP status. Look up the entity name and its CIN or LLPIN on the Ministry of Corporate Affairs portal, mca.gov.in. Confirm it exists, is active rather than struck off, and that quotation, contract and bank account carry the same name. An unregistered proprietorship is not disqualifying, but it changes who you can pursue later.
GST registration. Run the GSTIN through the portal’s taxpayer search, as above.
Headcount sanity check. The EPFO public establishment search covers registered establishments. Treat it as order-of-magnitude, not a census: coverage thresholds, multiple registrations and contract staffing all distort the number. But a firm claiming 200 engineers with an EPF footprint suggesting a dozen has a question to answer, and how they answer it is the real test.
References you choose. Pick two apps from their portfolio yourself rather than taking the two offered, and ask those clients what the final invoice was against the original quote, and why it moved.

Five questions, and the checklist

Ask these on a call. How fast the answers come matters as much as their content.

“Which three items here will take longest, and why?” Someone who estimated names them in seconds, and the reasons are technical. Someone who priced talks about design.
“What happens when a customer’s payment succeeds at the gateway but our server never hears back?” The best single question in app procurement. A good answer covers webhooks, retries, reconciliation and not charging twice. A blank one tells you the estimate has no hours for failure cases, which is most of the real work.
“Send me the 875 broken down by screen and module.” The response time is the answer.
“If my budget were ₹4 lakh, what would you cut first?” Reveals what they privately consider padding. “Nothing, it is all essential” means they have not understood that version one is a hypothesis.
“Who writes this code, what else are they on, and what if they resign in week six?” Attrition in Indian services firms is an operating condition, not an insult to raise. You want named people, and knowledge in the repository rather than in one head.

Then run the quote against this. Anything unticked is a question, not necessarily a problem.

Total divided by hours, and you know what seniority and which city that rate implies.
Hours decomposed to screen and module level, summing to the total, states and integrations itemised.
QA, project management and design as named lines with hours. Admin panel, auth flows, push, analytics and store submission explicitly in scope.
Backend, hosting, third-party costs and store fees identified, with an owner each.
GST position stated, GSTIN verified active, TDS settled in a sentence.
Pricing model named, hour 876 has an owner, and the warranty period, bug-versus-change definition and decision rule are in writing.
Advance around 30% or less, buyer-verifiable milestones, 10% to 15% held until acceptance.
Written IP assignment effective on creation, plus a third-party component disclosure.
Every account and the repository in your name before work starts, and the entity checked on MCA.

The verdict, plainly. The rate is fine. The hours are unverified. If the breakdown arrives, reconciles and includes the invisible work, ₹6,00,000 for 875 hours is a fair-to-good price in India. If it never arrives, or arrives as four phase totals, you are not looking at a cheap quote. You are looking at a number, and the gap between that number and a finished product gets filled with change requests at whatever rate the vendor feels like charging by then.

Want a second pair of eyes before you sign?

AB7 Solutions builds applications, APIs and the backends behind them, so we also spend time reading other firms’ quotations for founders who want the arithmetic checked by someone not selling them the build. If you want those 875 hours decomposed independently, or a screen-and-state specification to send to three vendors so their prices finally compare, we do that as standalone work with no obligation to build with us. Call +1 321 341 7733, email ab@ab7solutions.com or director@ab7solutions.com, or start at www.ab7solutions.com.

Sources: Apple Developer Program ($99 annual membership); Google Play Console Help on developer account registration and target API level requirements; GST portal, Search Taxpayer; Income Tax Department of India; Ministry of Corporate Affairs company and LLP master data; EPFO establishment search and the EPF & Miscellaneous Provisions Act 1952. GST and TDS rates are deliberately not quoted: confirm the position for your entity with your accountant. The cost-per-engineer arithmetic is an illustrative model on stated assumptions, not survey data. Checked September 2026.