Since the launch of ChatGPT in November 2022, exports of India’s computer services have increased by 30%, indicating an unprecedented boom in India’s technology sector. Franziska Ohnsorge, the Chief Economist for South Asia at the World Bank, highlighted this impressive growth story to show how India is uniquely positioned to benefit from the artificial intelligence revolution that is changing international trade.
The data presents a convincing picture. India’s tech sector has demonstrated its adaptability and resilience in the age of artificial intelligence, with software services exports rising from $36.23 billion in the quarter prior to ChatGPT’s public release to $47.32 billion in the April-June 2025 quarter.
The AI advantage: BPO sector leading the charge
The eager adoption of AI in India’s business process outsourcing sector is what makes the country’s AI story so intriguing. A startling 12% of BPO sector jobs now require AI skills, which is double what was required prior to ChatGPT and triple what other sectors require, according to Ohnsorge’s analysis of millions of job postings, though adoption rates are not the only factor here.
It illustrates a significant shift in the way the service industry functions in India. The nation is almost on par with advanced economies and ahead of the majority of emerging markets, ranking 46th on Oxford Insights’ Government AI Readiness Index. This is a significant accomplishment for a developing economy.
Services Surplus: India’s economic safety net
India’s booming services exports are significant in ways that go far beyond their impressive percentage gains. Services exports are essential for maintaining economic balance in a nation that saw a significant merchandise trade deficit of $122 billion in the first five months of fiscal year 2025–2026.
The $81 billion services trade surplus over the same time period significantly reduced the goods deficit, underscoring the importance of the tech and services sector to India’s economic stability. The trend is obviously shifting in India’s favor when compared to the prior year, when the services surplus was $68 billion against a comparable goods deficit.
The investment paradox: Growth amid challenges
However, there are some issues with this AI success story. In contrast to other emerging markets, the growth of private capital expenditure has actually slowed since the pandemic, despite the fact that AI-driven opportunities are drawing interest from the private sector. Ohnsorge points out an intriguing disparity: private investment is lagging behind public investment, which has greatly increased. Even so, the growth of private investment is “slower” than in other emerging markets. She clarifies, “It is slow by Indian standards, but not slow by international standards.”
India’s poor net foreign direct investment performance is arguably the most worrisome feature of its economic situation. After taking into consideration repatriations and outbound investments, net FDI was only $5.05 billion in July, despite gross FDI hitting a 50-month high of $11.11 billion.
Even worse was the fiscal year 2024–2025, when gross inflows of $80.62 billion were matched by net FDI of just $959 million. Foreign companies repatriating $51.49 billion and Indian firms investing $28.17 billion overseas caused this sharp decline from $10.15 billion in 2023–2024. These record figures, while individually positive, significantly decreased net inflows.
Poised for AI-driven growth
India is at an intriguing juncture. Its services industry is booming and producing a significant amount of foreign exchange, especially in AI-enabled technologies. The nation’s ability to adjust and succeed in emerging technologies is demonstrated once again, by the BPO industry’s quick adoption of AI skills and the remarkable 30% increase in exports since ChatGPT’s launch.
Still, there are difficulties. Maintaining this momentum will depend on luring and keeping foreign investment. The crucial query is whether India can use its success story in AI to speed up private capital expenditure and address more general investment concerns.
India’s initial success indicates that it is in a strong position to benefit greatly from the ongoing transformation of the global economy brought about by artificial intelligence. Whether this export boom driven by AI can result in greater economic acceleration and investment confidence will be determined over the coming years.
