India’s outsourcing industry is holding ground even as artificial intelligence reshapes work, with software services exports expanding to roughly 5.2 per cent of GDP from 3.3 per cent before the pandemic, according to a research note from ING Bank NV.
Higher-value work replaces routine tasks
ING economist Deepali Bhargava said the country is shifting away from repetitive, easily automated activities such as data entry and document verification towards services that are harder to automate — including analytics, engineering, risk management and research and development. That migration up the value chain has helped preserve demand for Indian outsourcing even as generative AI tools become more capable.
“AI disruption fears look premature in India and the Philippines,” Bhargava wrote in the note. “The evidence points to adaptation, not decline. AI is reshaping what gets outsourced, not shrinking demand for it.”
The report underlines two related trends: rising earnings from software exports and growing importance of business services within the economy. Software services exports have climbed to about 5.2 per cent of GDP from 3.3 per cent before the pandemic, while business services — a category including finance, accounting, engineering, research and analytics — have more than doubled their share to 3.3 per cent of GDP over the same interval.
Scale and employment
ING’s note places India at the centre of global outsourcing: the country is estimated to capture more than half of the worldwide outsourcing market and earns around $205 billion annually from software services exports. The sector supports about 5.8 million workers, making digitally delivered services a critical source of foreign exchange and employment.
Growth in digitally delivered services has outpaced the global average since 2022, the research highlights — rising 45 per cent in India versus 32 per cent globally — allowing India to gain market share in overseas demand for these services.
| Metric | India | Global |
|---|---|---|
| Software services exports (% of GDP) | 5.2% (from 3.3% pre-pandemic) | — |
| Business services (% of GDP) | 3.3% (more than doubled) | — |
| Software exports (annual) | $205 billion | — |
| Employment supported | 5.8 million | — |
| Growth in digitally delivered services since 2022 | 45% | 32% |
What this means for businesses and workers
- For firms: Clients are shifting outsourcing mandates toward specialised and higher‑margin activities such as analytics, software development and engineering design. Indian vendors that invest in domain expertise and reskilling are positioned to capture more complex work.
- For workers: Demand is rising for skills that complement AI — advanced analytics, model validation, research and client‑facing domain knowledge — rather than for routine processing roles vulnerable to automation.
- For the economy: Digitally delivered services continue to be a significant foreign‑exchange earner. Faster growth here helps cushion external balances and supports job creation in higher‑value segments.
ING’s assessment implies the unfolding AI wave is a catalyst for restructuring within outsourcing rather than an immediate threat to the sector’s scale. The bank points to adaptation — new services, upgraded skill sets and product repositioning — as the dominant response so far.
Policymakers and corporate leaders will need to focus on upskilling, standards for data and AI governance, and incentives for higher‑value service exports if India is to maintain momentum. For individual professionals, the takeaway is clear: deep domain skills and the ability to work with AI tools are likely to be the most durable sources of employment and wage growth in coming years.
This report from ING adds to an expanding body of evidence that while AI will transform work, the near‑term effect in India has been market restructuring and opportunity creation rather than large‑scale displacement.
