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India’s $421 Billion Services Engine Faces the AI Test
India sells many services to other countries, such as computer work, business advice and technology support.
In FY2025-26, these services were estimated to earn about $421.3 billion.
India also buys more physical goods from other countries than it sells, creating a large goods trade deficit.
The money earned from services helps cover much of that gap.
Companies are increasingly using India for research, engineering, analytics and cybersecurity, not just basic outsourcing.
This means India is doing more valuable and specialized work.
Artificial intelligence may change how these services are delivered.
AI could allow fewer people to produce the same amount of work or create new services.
India’s future success may depend on how much value workers can create with AI.
India’s services exports were estimated at $421.3 billion in FY2025-26, up from $387.5 billion the previous year.
Telecommunications, computer and information services contributed $206.6 billion, while business services added $124.2 billion.
A services surplus of about $214 billion offset roughly 64% of India’s $333.2 billion merchandise trade deficit.
Global Capability Centres are expanding India’s role in research, analytics, cybersecurity, engineering and other high-value functions.
Artificial intelligence could shift India’s model from exporting labour hours toward exporting AI-enabled expertise and business outcomes.
- Who
- India’s services-export sector, including technology companies and Global Capability Centres.
- What
- Services exports reached an estimated $421.3 billion and helped offset a large merchandise trade deficit, while artificial intelligence is beginning to reshape the sector.
- Where
- India, serving overseas clients and multinational companies.
- When
- FY2025-26, with services exports in the first four months of FY2026-27 also rising from a year earlier.
- Why
- The services surplus helps reduce pressure from India’s goods trade deficit, while AI is creating a need to move toward higher-value, technology-enabled work.
Key facts
- FY2025-26 services exports
- $421.3 billion, compared with $387.5 billion in FY2024-25.
- Official trade-series figure
- The Commerce Ministry trade series recorded services exports of $418.31 billion.
- Services surplus
- About $213.89 billion, based on services exports of $418.31 billion and imports of $204.42 billion.
- Merchandise trade deficit
- Approximately $333.2 billion in FY2025-26.
- Overall trade deficit
- About $119.3 billion when merchandise and services trade are combined.
- Largest services categories
- Telecommunications, computer and information services accounted for $206.6 billion; business services contributed $124.2 billion.
- Early FY2026-27 performance
- Services exports were estimated at $142.64 billion in the first four months, up about 8.8% year-on-year, with a $69.17 billion surplus.
Sources
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