India’s outsourced software industry grows 9.5 percent to reach $239 billion
Software product development industry shrinks a little, but if AI has dented prospects, it’s not in these numbers
India's IT services industry grew by 9.5% to reach a total of $239 billion in the latest financial year, according to a survey conducted by the Reserve Bank of India. While overall sales for Indian IT service providers increased by 8.2% in FY 25/26, the majority of that growth was not from software development. The survey, which collected data from over 7,500 technology services firms, found that software product development only contributed $56.5 billion to India's total services revenue, a slight decrease of over $1 billion.
The majority of India's IT services revenue, 91.7% or $203 billion, was generated through non-premises services, meaning the work was not performed on clients' premises. The US was India's largest market for IT services, accounting for $119.7 billion of sales, a 4.2% increase from the previous year. The UK followed closely behind, with $34 billion in sales, up from $31.8 billion.
The survey also revealed that foreign affiliates of Indian companies earned $26.4 billion in services revenue, bringing the total earnings of Indian software services companies to $239.3 billion - a 9.5% increase from the previous financial year.
Despite the growth in overall IT services revenue, India's tech service giants have expressed concerns about potential "AI deflation," which could result in revenue declines as artificial intelligence takes over tasks currently performed by humans. However, the survey suggests that this deflationary impact has not yet materialized. India is ranked as the world's second-largest exporter of IT services, behind only the Republic of Ireland. The USA, China, and the UK rounded out the top five exporters of IT services.
Written by urgent.news from The Register's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
