The Microsoft software, which includes tools such as Excel, lets users type in Hindi or nine other regional Indian languages and can translate words from English.
"We have been working on this product for the last six years because we realised that only five percent of India's population speaks and writes English," said Microsoft on Monday.
A company spokeswoman said more than 400 professionals worked on the project, which was announced by founder Bill Gates on a visit to India two years ago.
India is the world's second most populous country. Nearly one in every five Microsoft users is Indian or of Indian origin and nine out of every 10 computers in India uses Microsoft Office.
Microsoft was one of the first multinational IT firms to tap the skills of Indian software professionals in India's "Silicon Valley" of Bangalore before other global firms such as IBM, Intel, Dell and Cisco moved in.