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What is a bug bounty program and is it right for an Indian SME?

A bug bounty programme pays external researchers to report vulnerabilities in your systems, usually a percentage of a stated range, rather than paying a fixed fee for a test. It suits an Indian SME when you have a stable public API and can triage findings continuously. It does not suit you when a bug is worth more than the bounty, or when nobody on your side can respond within 72 hours. A bounty is a complement to a test, never a replacement for one.

Key takeaways

  • Bounties are usually a percentage of a published range, typically starting at 5% for low severity and reaching Rs 2,50,000 for a critical finding, so the range must be published up front.
  • A programme needs a written safe harbour and a defined scope, otherwise researchers have no legal basis to test under sections 43 and 66 of the IT Act, 2000, and no incentive to report to you.
  • Typical critical finding bounties in Indian public bug bounty programmes sit in the Rs 25,000 to Rs 2,50,000 band, and a single critical finding can exceed the whole bounty budget.
  • Triage, not the testing, is the bottleneck: a programme that does not reply to reports within 72 hours gets abandoned by researchers.
  • The DPDP Act, 2023 applies to the personal data in scope, so the programme policy must state how researchers handle personal data they encounter.

As of 24 October 2026: the service descriptions, prices and turnaround figures on this page are current.

How does a bug bounty programme actually work?

Five moving parts. A scope document naming exactly which domains, APIs, mobile applications and infrastructure are in bounds, and everything else is out of bounds by default. A published severity matrix that maps each finding type to a monetary range, so a researcher knows what a valid critical report is worth and you know what you will pay. A safe harbour clause stating that testing within the published scope and the published rules will not be treated as an offence under the IT Act, 2000, which is the only practical protection a researcher has. A reporting channel, ideally a platform that handles disclosure and payment, and a private reporting path for findings that involve live customer data. And a triage process with a named owner and a response time, because a programme without one is a liability.

When does a bounty work for an Indian SME?

When three conditions hold. One: you have a stable, public-facing attack surface, usually an API, a mobile application or a customer portal, and you can name the endpoints. Two: you can triage continuously, because researchers judge programmes by response time and an unanswered report is the fastest way to lose the community you are trying to attract. Three: your worst realistic bug is worth less than or comparable to the bounty you will pay, so the economics do not invert. If a single flaw in your payment logic could cost you Rs 50,000 in one transaction and the maximum bounty is Rs 25,000, a bounty is a discount on your adversary. In that case, buy a penetration test at a fixed price instead, where you control the effort and the deliverable.

What are the costs people forget?

Four. Triage effort, which is real work: reading each report, reproducing it, deciding severity and closing it. Payment administration, including the tax treatment of a payment to an individual and, where the platform operates as an intermediary, its own fee. The reputational cost of a public disclosure you did not want, which is why the safe harbour, the scope and the disclosure policy matter as much as the money. And the very real risk that a critical finding in production is discovered by a stranger during business hours rather than by a tester you scheduled. The last one is the argument for running a bounty and a test together rather than choosing between them.

What about the law and the data privacy side?

Two things. First, the legal footing. Because the researcher is testing your systems, the authorisation is the safe harbour in your policy, and it must be explicit about the permitted techniques, the prohibited ones and the reporting channel, because without it the researcher is exposed under sections 43 and 66 of the IT Act, 2000. Second, the data privacy side. Under the DPDP Act, 2023, the personal data in your scope is your responsibility, and a programme needs a stated position on what a researcher must do when they encounter personal data: stop, do not download, do not retain, and report it immediately. Programs that say nothing about this attract exactly the reports you do not want.

Bug bounty against penetration test, for an Indian SME with a public API
DimensionBug bounty programmePenetration test
Cost shapePays only for valid findings, per severity bandFixed price, typically Rs 45,000 - Rs 1,20,000 per application
TimingContinuous, no scheduled windowAgreed 1-2 week testing window
CoverageOpportunistic, depends on who looksGuaranteed against the agreed scope
Triage loadContinuous, usually the bottleneckOne report review at the end
Risk if you ignore itPublic disclosure during business hoursKnown findings remain open until the retest

What are the frequently asked questions?

What is a bug bounty program and is it right for an Indian SME?
A bug bounty programme pays external researchers to report vulnerabilities in your systems, usually a percentage of a stated range, rather than paying a fixed fee for a test. It suits an Indian SME when you have a stable public API and can triage findings continuously. It does not suit you when a bug is worth more than the bounty, or when nobody on your side can respond within 72 hours. A bounty is a complement to a test, never a replacement for one.
How much do bug bounty findings pay in India?
Typically a percentage of a published range. Low-severity findings often start around 5% of the range, while critical findings in Indian public programmes commonly sit in the Rs 25,000 to Rs 2,50,000 band. Publish the matrix so the amount is never a negotiation.
Is a bug bounty cheaper than a penetration test?
It is cheaper per unit of continuous coverage, and it is not a substitute. A penetration test at a fixed price, typically Rs 45,000 to Rs 1,20,000 for a web application, gives you a guaranteed deliverable and a schedule. A bounty gives you opportunistic findings only if someone happens to look.
Do I need a safe harbour for researchers?
Yes, and it should be explicit. State that testing within the published scope and rules will not be treated as an offence under the IT Act, 2000, and list the permitted and prohibited techniques. Without it, researchers are exposed and will not engage.
Can I run a bounty on an internal-only application?
Not usefully. A bounty needs an attack surface researchers can reach, which means public-facing systems or a published, hosted trial environment. For internal applications, a scoped penetration test or an internal red team assessment is the right instrument.

Get a straight answer on this

Send us your public domains and API endpoints and we will return a bounty scope, a severity-to-bounty matrix and a safe harbour clause you can publish.

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Last reviewed: 24 October 2026. Information on this page is general guidance, not legal advice. Prices are indicative bands for a typical scope and are confirmed in a written quote before any work begins.