India’s software exports rise 8.2% to $221.4 billion in FY26, US share grows
India’s Software Services Exports Reach $221.4 Billion in FY26
Theindiapostdaily.com – India’s software services sector added another year of growth in 2025-26, with exports climbing to $221.4 billion as overseas demand for technology, business-process and engineering work remained strong. The increase of 8.2% from the prior year underlines the continued importance of digital services to India’s external trade earnings.
The Reserve Bank of India’s annual Survey on Computer Software and Information Technology Enabled Services Exports for 2025-26 recorded software services exports of $221.4 billion, excluding revenues earned through the overseas commercial operations of Indian companies. The comparable figure for 2024-25 was $204.7 billion.
The survey examines the sector through several lenses, including the kind of service delivered, customer location, delivery method and mode of supply. Its findings show that the United States remained India’s most important software market, while off-site delivery continued to account for the vast majority of exports.
Computer services retain the largest share
Computer services formed 69.3% of India’s software services exports in 2025-26, improving on their 67.4% share a year earlier. This category remained the core of the country’s technology-export business.
Within computer services, exports of IT services increased to $147 billion from $131.3 billion in 2024-25. Software product development moved in the opposite direction, declining to $6.4 billion from $6.8 billion in the previous financial year.
IT-enabled services, commonly referred to as ITES, also expanded, rising to $68 billion from $66.6 billion. Business process outsourcing continued to be the dominant ITES activity, contributing $56 billion, or 82.4% of the category’s export value. Engineering services generated $12 billion, compared with $10.8 billion in 2024-25.
The figures illustrate the broad range of work included in India’s software exports: technology implementation and support, outsourced business operations, product-development work and specialised engineering services. While IT services supplied the largest portion of export income, BPO remained a major pillar within the wider ITES segment.
US share rises above 54%
The United States strengthened its position as India’s leading destination for software exports. Its share rose to 54.1% in 2025-26 from 52.9% in the preceding year, taking the value of exports to the US to $119.7 billion.
Europe remained the second-largest regional market, accounting for 31.8% of software services exports. The United Kingdom alone represented a 15.4% share of India’s total software exports.
The concentration of demand in the US and Europe was mirrored in the currencies used for invoicing. The US dollar accounted for 72.6% of software export invoices in 2025-26, up from 72% a year earlier. The euro represented 9.6%, while pound sterling made up 6%.
The rupee’s portion of invoicing declined to 6.3% from 7.1% in 2024-25. For businesses serving international clients, the continued dominance of foreign-currency invoicing remains an important feature of the sector’s operating environment.
Off-site delivery remains central
Most software services were provided remotely from India rather than through personnel working at client locations abroad. Off-site exports reached $203 billion in 2025-26 and represented 91.7% of total software services exports. Their share had been 90.7% a year earlier.
On-site delivery accounted for the remaining 8.3%. The growing weight of off-site work highlights the central role of remote service delivery in the industry’s export model.
Private limited companies were the largest organisational group in the survey results. They accounted for 60.8% of software services exports and generated $134.6 billion, up from $123.1 billion in 2024-25. Public limited companies made up 36.9% of exports, with shipments valued at $81.7 billion.
Overseas commercial presence lifts total exports
When services supplied through the overseas commercial presence of Indian companies are included, total software services exports rose 9.5% to $239.3 billion in 2025-26. The equivalent total in the prior year was $218.6 billion.
Cross-border supply, classified as Mode 1, contributed $202.7 billion. Commercial presence abroad, classified as Mode 3, added $17.9 billion. This distinction captures the difference between services delivered across borders and business generated locally through operations established overseas.
Foreign affiliates of Indian companies also expanded their local software business. Their activity reached $17.9 billion in 2025-26, compared with $13.9 billion in the previous year. The US and the UK continued to be the principal destinations for this affiliate-led business.
The RBI contacted 7,569 software-exporting companies for the 2025-26 exercise, receiving responses from 2,363 firms. Those respondents represented about 89% of estimated total software services exports, providing a broad view of a sector that remains heavily linked to demand in the US and European markets.
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