Key Points
- India's software exports rose 8.2 per cent to $221.4 billion in 2025-26
- US share of exports climbed to 54.1 per cent, reversing the previous year's decline
- Software product development exports fell to $6.4 billion from $6.8 billion
India‘s software services exports grew 8.2 per cent to $221.4 billion in 2025-26, with information technology services and engineering accounting for most of the increase, according to data released by the Reserve Bank of India (RBI) on Friday (18 September). The growth exceeded the 7.3 per cent recorded in the previous financial year, when software exports stood at $204.7 billion.
The figures, drawn from the RBI’s annual Survey on Computer Software and Information Technology Enabled Services Exports, show considerable variation within the industry. Traditional IT services expanded, engineering exports continued to grow and software product development, which involves creating packaged software for sale, declined after a strong performance in 2024-25. Business process outsourcing (BPO) revenues remained nearly flat.
The United States increased its share of India’s software exports to 54.1 per cent from 52.9 per cent, reversing a decline recorded in the previous year. Europe remained the second-largest market but its share fell despite higher export revenues. Together, the US and Europe accounted for nearly 86 per cent of India’s software services exports.
Product development
Computer services, which include IT services and software product development, accounted for 69.3 per cent of India’s software exports in 2025-26, up from 67.4 per cent a year earlier. Exports of computer services increased to $153.4 billion from $138.1 billion. Within this category, IT services generated $147 billion, compared with $131.3 billion in the previous year.
Software product development moved in the opposite direction. Exports from this segment declined to $6.4 billion from $6.8 billion, reducing its share of total software exports to 2.9 per cent from 3.3 per cent. The decline follows a strong performance in 2024-25, when product development exports had increased from $5.5 billion to $6.8 billion.
The RBI does not explain the reasons for the decline. Its figures do not establish whether the fall shows changes in customer demand, pricing, business models or other factors.
Growth in the broader IT services industry does not necessarily indicate a corresponding increase in exports of software products, because the two are reported separately.
Engineering and BPO
Engineering services continued to expand in 2025-26, with exports rising to $12 billion from $10.8 billion in the previous year. The segment had recorded exports of $9.6 billion in 2023-24, indicating growth across all three years.
Product design engineering recorded a particularly sharp increase. Exports in this category, which covers mechanical and electronics engineering but excludes software, rose to ₹25,674 crore from ₹14,934 crore.
Embedded solutions exports also increased, reaching ₹17,856 crore from ₹15,861 crore. Other engineering services, the largest category within the segment, generated exports of ₹62,019 crore, compared with ₹58,566 crore a year earlier.
BPO recorded little growth in dollar terms. Exports stood at $56 billion in 2025-26, compared with $55.8 billion a year earlier. The segment’s share of total software services exports declined to 25.3 per cent from 27.3 per cent. This followed a much stronger performance in 2024-25, when BPO exports had increased from $50.1 billion to $55.8 billion.
Within BPO, finance and accounting services declined to $8 billion from $8.2 billion. Business consulting services increased to $4 billion from $3.8 billion. Supply chain and logistics-related services rose to $1 billion from $0.8 billion. The broad category of other BPO services remained the largest, accounting for $42.2 billion of exports.
Market concentration
The US remained India’s largest software export destination, accounting for $119.7 billion in 2025-26, up from $108.3 billion in the previous year. Its share of total software exports increased by 1.2 percentage points to 54.1 per cent.
This increase is a reversal of the trend recorded in 2024-25, when the US share had fallen from 54.1 per cent to 52.9 per cent. During that year, software exports to the US grew 4.9 per cent, compared with 14.3 per cent growth in exports to Europe, according to the RBI’s previous survey.
Exports to Europe increased to $70.3 billion from $67.2 billion, but the region’s share of India’s software exports declined to 31.8 per cent from 32.8 per cent. The United Kingdom remained the largest European destination, accounting for $34 billion in exports, compared with $31.8 billion a year earlier.
Asia accounted for $13.9 billion in software exports, up from $13 billion. Its share slipped marginally to 6.3 per cent. Exports to Australia and New Zealand increased to $5.5 billion from $5 billion. Canada accounted for $3 billion.
Within Asia, East Asia remained the largest market, accounting for $11.8 billion in exports. South Asia recorded a decline to approximately $0.1 billion from $0.3 billion. The geographical distribution leaves India heavily dependent on demand from the US and Europe.
Off-site services, delivered without engineers or other professionals being physically present at customer locations, accounted for 91.7 per cent of total software exports in 2025-26, compared with 90.7 per cent in the previous year. Exports delivered through the off-site model increased to $203 billion from $185.7 billion. On-site services declined to $18.4 billion from $19 billion.
The shift towards off-site delivery has been consistent across the three financial years covered by the RBI data. In 2023-24, off-site services accounted for 90 per cent of exports, rising to 90.7 per cent in 2024-25 and 91.7 per cent in 2025-26. The figures measure the value of services delivered through different models but do not establish how many employees worked remotely or how artificial intelligence affected staffing requirements.
When services supplied through the overseas commercial presence of Indian companies are included, total software services exports reached $239.3 billion in 2025-26, up 9.5 per cent from $218.6 billion a year earlier.
By the numbers
Key figures from this story- $221.4 billion
- India software exports in 2025-26
- 54.1%
- US share of India's software exports
- $6.4 billion
- Software product development exports, down from $6.8B
The distinction shows how the RBI measures international trade in services. The headline export figure covers services supplied without including sales made locally by foreign affiliates of Indian companies. The broader figure adds those overseas commercial operations.
Local software business conducted by foreign affiliates increased to $17.9 billion from $13.9 billion. The US remained the largest market for these overseas operations, followed by the UK.
The US dollar continued to dominate the currency composition of India’s software exports. Exports invoiced in dollars increased to $160.7 billion from $147.4 billion. The dollar’s share of total exports rose to 72.6 per cent from 72 per cent. The euro remained the second-largest invoicing currency, accounting for 9.6 per cent of exports. The rupee’s share declined to 6.3 per cent from 7.1 per cent.
Private limited companies remained the largest organisational category. Their exports increased to $134.6 billion from $123.1 billion, a growth of 9.3 per cent. Their share of total software exports rose to 60.8 per cent from 60.1 per cent. Public limited companies recorded exports of $81.7 billion, compared with $77.2 billion in the previous year.
Your Questions, Answered
How much did India's software exports grow in 2025-26?
India's software services exports grew 8.2 per cent to $221.4 billion in 2025-26, according to RBI data. This exceeded the 7.3 per cent growth recorded in 2024-25.
What happened to software product development exports?
Software product development exports declined to $6.4 billion from $6.8 billion in 2025-26, reversing the strong growth recorded in the previous year. The segment's share fell to 2.9 per cent from 3.3 per cent.
Which country is the largest market for India's software exports?
The United States remained the largest market, accounting for $119.7 billion or 54.1 per cent of India's software exports in 2025-26. This share increased from 52.9 per cent in the previous year.
What share of India's software exports is delivered remotely?
Off-site services accounted for 91.7 per cent of total software exports in 2025-26, up from 90.7 per cent in the previous year. This means most work is delivered from India without professionals travelling to client locations.
