Open-source ERP has moved from a niche choice to a mainstream one for Indian businesses, for three reasons: no licence fee, GST through open-source apps, and ownership of your data and code. This guide is the map: what open-source ERP means, what it costs, and how to choose, migrate and run it.
Short answer
Open-source ERP means running business software with no licence fee, on infrastructure you choose, with the right to read and change the code. The main options in India are ERPNext (GPL-3.0, on the MIT-licensed Frappe Framework, with GST through the open-source India Compliance app), Odoo Community (LGPL-3.0, with some apps only in the paid Enterprise edition), ERP5 and iDempiere. You pay a one-time implementation fee plus hosting and support. SAP Business One and Odoo Enterprise add a licence on top; ERPNext does not.
To see what ERPNext would cost for your business, estimate your price.
Four open-source ERPs worth considering in India
- ERPNext on the Frappe Framework. GPL-3.0. Accounting, stock, manufacturing, CRM and projects in one product, Frappe HR for payroll, and Indian GST through the India Compliance app by Resilient Tech.
- Odoo Community. LGPL-3.0. A large app catalogue; some apps and features, including full accounting and Studio, are only in the paid Enterprise edition.
- ERP5. GPL, by Nexedi. Long established, with a flexible data model; a smaller community in India.
- iDempiere. GPLv2, Java-based. A smaller community, used mainly in distribution and supply-chain operations.
Most Indian businesses hit the same wall. The off-the-shelf accounting tool stops scaling, and the proprietary ERP quote arrives with a licence that grows with every user. Open-source ERP changes that trade-off: you pay for implementation and hosting, not for a licence that renews every year.
This is a hub. Each section gives the short answer and links to an India-specific guide. If you already know you want ERPNext, the ERPNext implementation services page shows how a go-live runs, stage by stage.
Quick answer
Open-source ERP is business software whose source code you can use, change and host yourself with no licence fee. For Indian businesses, ERPNext is an open-source ERP that covers accounting, inventory, manufacturing, HR and CRM, handles GST and e-invoicing through the India Compliance app, and lets you own the data and infrastructure outright.
What does open-source ERP actually mean?
An open-source ERP gives you the full source code under an open licence. You can run it on your own servers, change how it works, and never pay a per-seat fee. ERPNext is licensed under GPL-3.0; the Frappe Framework it runs on is MIT-licensed.
The practical difference is ownership. With a proprietary ERP, you rent access. With ERPNext, the system is yours: if you part ways with your implementer, the software, data and customisations stay with you.
Why are Indian businesses choosing it?
Three reasons: cost, compliance and control.
- Cost. No per-user licence means the software bill does not grow with headcount. SAP Business One and Odoo Enterprise charge per user; ERPNext has no licence fee at any user count, so you pay for implementation, hosting and support.
- Compliance. On ERPNext, the India Compliance app handles CGST, SGST and IGST, e-invoicing with IRN and QR code through the government's Invoice Registration Portal, e-way bills, and GSTR-1 and GSTR-3B preparation. GST moved out of ERPNext's core into this app in version 14.
- Control. You decide where the data lives (an Indian cloud region, your own cloud account, or on-premises) and how workflows behave.
How much does it cost?
ERPNext implementation is a one-time fee plus hosting and support. There is no licence fee at any point. What moves the fee is scope: the modules you need, the number and kind of users, how much you customise, how much data you migrate (source system, years of history, data quality), the integrations you need, and how many legal entities you run.
The calculator splits a project into stages (Discover, Install, Migrate data, Integrate, Customise, Train and go-live, Run) so you can see which ones your business needs. Estimate your price.
How does ERPNext compare with the big names?
- ERPNext vs SAP Business One: similar core coverage for most Indian SMEs, without the per-user licence.
- ERPNext vs Odoo for small business in India: two open-source ERPs, and where the Enterprise-only apps matter.
- ERPNext vs Zoho for Indian SMBs: one open-source ERP against a per-user SaaS suite.
All three name the cases where the other option is the better fit. MithTech implements or supports all four products, so the comparisons are about fit, not about selling one of them. If you are also weighing AI, see does ERPNext have AI features, and when you are ready to choose who builds it, how to compare ERPNext implementers in India.
How do you get your data in?
Most Indian businesses come from Tally. You keep your Tally data as a historical archive and start in ERPNext from a clean cut-over date. The work is in mapping ledgers and opening balances correctly.
The full process, mapping table and pitfalls: Tally to ERPNext migration, and the Tally to ERPNext service.
How do you stay compliant with GST e-invoicing?
E-invoicing trips up more ERP rollouts than anything else. On ERPNext it runs through the India Compliance app: IRN generation, QR codes, e-way bills and several GSTINs in one system.
Step-by-step setup and common errors: GST e-invoicing in ERPNext.
Where do you run it?
Because ERPNext is open source, hosting is your only infrastructure cost, and you have real choices, from a Hetzner VPS to AWS to fully managed hosting. The right pick depends on user count, where the data must sit, and how much operations work you want to own.
Sizing and cost comparison: self-hosting ERPNext on AWS, Hetzner or managed hosting, or managed hosting if you want someone else to run it.
What else does the open-source stack cover?
ERPNext is the core, and the same approach works across the rest of the stack:
- Manufacturing: BOMs, work orders and job work for Indian factories: ERPNext for manufacturing in India and the manufacturing page.
- Distribution: tracking distributor sell-through: track primary and secondary sales in ERPNext.
- Automation: self-hosted workflow automation: n8n vs Zapier vs Make.
- Commerce: headless B2B storefronts: Medusa vs Shopify Plus for B2B.
Our ERPNext implementation service connects these so they share one source of truth.
At a glance
| Short answer | |
|---|---|
| Licence fee | None for ERPNext (GPL-3.0) or Odoo Community (LGPL-3.0); Odoo Enterprise and SAP Business One charge per user |
| Indian GST and e-invoicing | Through the India Compliance app on ERPNext |
| What you pay for | Implementation, hosting and support |
| What sets the timeline | Modules, data quality, integrations and custom work |
| Where it runs | Your servers, any cloud, or a managed host |
| Who owns the code and data | You |
Frequently asked questions
+Is open-source ERP secure for business use?
Yes. The code can be inspected by anyone, and self-hosting means your data stays on infrastructure you control. Security depends on proper deployment (encrypted backups, access controls, timely patches), which a competent implementer sets up as standard. More in how secure is ERPNext.
+Is ERPNext really free?
The software has no licence fee: it is GPL-3.0 with no per-user charge. Your costs are implementation, hosting and support. That is different from "free trials" of proprietary ERP that turn into per-seat billing as you grow.
+Can open-source ERP handle Indian GST and compliance?
Yes. On ERPNext, the India Compliance app covers GST, e-invoicing (IRN and QR code through the Invoice Registration Portal), e-way bills and GSTR-1 and GSTR-3B preparation; TDS and TCS use ERPNext's tax withholding. Indian payroll (PF, ESI, professional tax) is set up in Frappe HR.
+Which open-source ERP fits Indian SMEs?
For most Indian SMEs, ERPNext: it covers manufacturing, HR, CRM and accounting in the open-source product, and GST through the India Compliance app, with no licence fee. Odoo Community is the main alternative; check which of the apps you need are only in the paid Enterprise edition. The ERPNext vs Odoo comparison goes through it.
+Do I need in-house developers to run ERPNext?
No. Day-to-day use needs no developers. Customisation and integrations are usually handled by an implementer, and because the code is yours, you can bring that work in-house later or change implementer without losing anything.
+How long until we are live?
It depends on the modules in scope, how clean your data is, the integrations and the custom work. A phased plan lets you start with core accounting and GST and add modules over time; the price estimator prices each area for your scope.
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Manoj · Published on 7 June 2026
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