Reshaping, not shrinking: How India’s $205 billion tech engine defies job threats in AI era
The performance challenges concerns that generative AI could undermine one of India’s most important industries by automating work traditionally outsourced to lower-cost markets, according to ING Bank NV study.
- Sep 18, 2026,
- Updated Sep 18, 2026 3:06 PM IST
India’s outsourcing industry is showing little sign of losing ground to artificial intelligence as the country moves up the value chain into services that are harder to automate, according to ING Bank NV study.
Software services exports have climbed to roughly 5.2% of gross domestic product (GDP) from 3.3% before the pandemic, ING economist Deepali Bhargava wrote in a note on September 16.
Business services, including finance, accounting, engineering, research and analytics, have more than doubled their share of GDP to 3.3% over the same period.
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The performance challenges concerns that generative AI could undermine one of India’s most important industries by automating work traditionally outsourced to lower-cost markets. India commands more than half of the global outsourcing industry and earns around $205 billion annually from software services exports, which support about 58 lakh workers, according to ING.
Software and business services exports together account for about 8.5% of GDP and provide an important source of foreign exchange.
“AI disruption fears look premature in India and the Philippines,” Bharghava, who heads ING’s Asia-Pacific research, said. “The evidence points to adaptation, not decline. AI is reshaping what gets outsourced, not shrinking demand for it.”
Growth is shifting away from repetitive tasks such as data entry, document verification and customer support toward higher-value work including analytics and software development. India is also seeing strong demand for services such as risk management, engineering design and research and development.
India’s digitally delivered services exports have grown 45% since 2022, compared with 32% globally, allowing the country to gain market share, the ING study found.
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The shift suggests that artificial intelligence is changing the nature of outsourced work rather than reducing demand for India’s outsourcing industry. As services move toward analytics, software development, risk management, engineering design and research and development, India’s outsourcing sector is increasingly moving toward higher-value activities that are harder to automate.
The growth in software and business services exports also highlights the sector’s continued importance to India’s economy. With software services exports at roughly 5.2% of GDP and business services at 3.3%, the combined contribution stands at about 8.5% of GDP, while the sector supports around 5.8 million workers.
India’s outsourcing industry is showing little sign of losing ground to artificial intelligence as the country moves up the value chain into services that are harder to automate, according to ING Bank NV study.
Software services exports have climbed to roughly 5.2% of gross domestic product (GDP) from 3.3% before the pandemic, ING economist Deepali Bhargava wrote in a note on September 16.
Business services, including finance, accounting, engineering, research and analytics, have more than doubled their share of GDP to 3.3% over the same period.
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The performance challenges concerns that generative AI could undermine one of India’s most important industries by automating work traditionally outsourced to lower-cost markets. India commands more than half of the global outsourcing industry and earns around $205 billion annually from software services exports, which support about 58 lakh workers, according to ING.
Software and business services exports together account for about 8.5% of GDP and provide an important source of foreign exchange.
“AI disruption fears look premature in India and the Philippines,” Bharghava, who heads ING’s Asia-Pacific research, said. “The evidence points to adaptation, not decline. AI is reshaping what gets outsourced, not shrinking demand for it.”
Growth is shifting away from repetitive tasks such as data entry, document verification and customer support toward higher-value work including analytics and software development. India is also seeing strong demand for services such as risk management, engineering design and research and development.
India’s digitally delivered services exports have grown 45% since 2022, compared with 32% globally, allowing the country to gain market share, the ING study found.
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The shift suggests that artificial intelligence is changing the nature of outsourced work rather than reducing demand for India’s outsourcing industry. As services move toward analytics, software development, risk management, engineering design and research and development, India’s outsourcing sector is increasingly moving toward higher-value activities that are harder to automate.
The growth in software and business services exports also highlights the sector’s continued importance to India’s economy. With software services exports at roughly 5.2% of GDP and business services at 3.3%, the combined contribution stands at about 8.5% of GDP, while the sector supports around 5.8 million workers.