Indian IT services companies increased their sales by 8.2 percent in FY 25/26, but less of that money went towards development of software products.

Those numbers come from the annual Survey on Computer Software and Information Technology Enabled Services published [PDF] by the Reserve Bank of India.

The Bank asked over 7,500 tech services firms for data and received replies from 2,363. It then extrapolated the results to suggest that Indian companies billed for $221 billion worth of services last financial year. $147 billion of those billings were for what the bank describes as “IT services” and another $56 billion went towards business process outsourcing (BPO).

Software product development earned India $56.5 billion, making it the only category to go backwards – albeit by just over $1 billion. India’s BPO sector eked out just $200 million annual growth, and saw revenue reductions for accounting, auditing, bookkeeping and tax consulting services, and for HR admin.

Demand for offshored medical transcription and document management nearly doubled.

The US remained India’s top market, accounting for $119.7 billion of sales, up from $108.3 billion in the prior year. UK-based buyers sent $34 billion worth of business to India, up from $31.8 billion.

The overwhelming majority of services the bank measured – 91.7 percent or $203 billion – were not performed on clients’ premises.

The Bank also found another $26.4 billion of services revenue earned by foreign affiliates of Indian companies, taking the total earnings of Indian software services companies to $239.3 billion. That sum is 9.5 percent higher than for the 24/25 financial year.

$17.9 billion of revenue from those foreign affiliates was earned outside India, a $4 billion jump in a year.

India’s tech services giants have warned of possible “AI deflation” that means their revenue falls as AI takes over some work performed by humans. The numbers in this survey suggest that’s yet to happen.

The World Bank ranks India as the world’s second-biggest exporter of IT services, behind the Republic of Ireland. The Register fancies that result reflects Ireland’s role as the legal and financial home for many giant tech companies, rather than its possession of an offshoring/outsourcing industry to rival India’s.

The USA ($102 billion), China ($73 billion) and the UK ($65 billion) round out the top five tech services exporters. ®