ING: No Signs Yet of AI Replacing Indian Outsourcing Industry

ING stated that as India moves up the value chain and into service sectors that are harder to automate, there is almost no sign that the country’s outsourcing industry is being replaced by artificial intelligence. Economist Deepali Bhargava wrote that the share of software services exports in GDP has risen from 3.3% pre-pandemic to about 5.2%. During the same period, business services—including finance, accounting, engineering, research, and analysis—more than doubled their share of GDP to reach 3.3%. This performance challenges concerns that generative AI might weaken one of India’s most important industries by automating traditional outsourcing work. According to ING data, India accounts for over half of the global outsourcing industry, earning around $205 billion annually from software services exports and supporting about 5.8 million workers. Software and business services exports together account for about 8.5% of GDP and serve as an important source of foreign exchange.