ING: India's Outsourcing Sector Shows Few Signs of AI Displacement

ING Bank NV said on Sept. 16, 2026 that India's outsourcing industry shows little sign of being displaced by artificial intelligence. Economist Deepali Bhargava wrote in a research report that as India moves up the value chain and expands into services that are harder to automate, earlier fears that generative AI would take over jobs outsourced to low-cost locations have eased.

Software services exports have risen to about 5.2% of India's GDP from 3.3% before the pandemic, while business services -- including finance, accounting, engineering, research and data analytics -- more than doubled to 3.3% of GDP. India accounts for more than half of the global outsourcing market. Software services exports generate around $205 billion in revenue annually and support about 5.8 million jobs; software and business services together account for roughly 8.5% of GDP and are a major source of foreign exchange.

Bhargava said fears of AI-driven disruption are premature in India and the Philippines. Current signs suggest the industry is adapting rather than shrinking. AI is changing what gets outsourced, not reducing the overall demand for outsourcing services. Growth is shifting from repetitive tasks such as data entry and customer support to higher-value work such as data analytics and software development, while demand for risk management, engineering design and R&D services remains strong. According to ING data, India's digitally delivered services exports have grown 45% cumulatively since 2022, exceeding the global growth rate of 32%.