India’s computer services exports have seen a remarkable 30% jump since OpenAI’s ChatGPT came into public use in November 2022, according to Franziska Ohnsorge, chief economist for the South Asia Region at the World Bank. Speaking at the Fourth Kautilya Economic Conclave in New Delhi, organised by the Ministry of Finance and the Institute of Economic Growth, she said India’s software services sector was riding on the back of the global AI boom.
Fresh figures from the Reserve Bank of India (RBI) back her view. Between April and June 2025, India exported software services worth $47.32 billion — a 13% rise from the same period last year. In comparison, in the quarter before ChatGPT’s release (July–September 2022), software exports stood at $36.23 billion.
Ohnsorge said India was “well placed” to gain from artificial intelligence, particularly in the Business Process Outsourcing (BPO) sector, where adoption has been rapid.
She noted that around 12% of BPO job listings since ChatGPT’s release now demand AI-related skills — twice as many as before, and three times more than other industries. “The BPO sector is enthusiastically embracing AI,” she said, pointing out that India ranked 46th on Oxford Insights’ Government AI Readiness Index, nearly on par with developed economies and well ahead of most emerging markets.
India’s booming service exports are cushioning its widening goods trade deficit. Preliminary data from the Ministry of Commerce and Industry show that between April and August 2025, India posted a goods trade deficit of $122 billion — largely offset by a services surplus of $81 billion.
A year earlier, the goods deficit stood at $121 billion and the services surplus at $68 billion, suggesting that the export of IT and software services has helped hold the trade gap steady even amid global uncertainty.
While the AI revolution promises to draw fresh private investments, Ohnsorge warned that the overall pace of private capital expenditure remains sluggish compared to pre-Covid trends. “This is the opposite of what we see in other emerging markets,” she said.
Public investment, meanwhile, has accelerated sharply, helping sustain India’s growth. Even so, she clarified that while private investment appears “slow by Indian standards,” it is still performing better than in many comparable economies.
India’s foreign direct investment (FDI) paints a mixed picture. While gross inflows in July touched a 50-month high of $11.11 billion, net FDI stood much lower at $5.05 billion, RBI data show.
The gap arises because companies are both investing and pulling money out. Net FDI is the result after adjusting for foreign firms repatriating profits and Indian firms investing abroad — and the latter has been happening more often.
In 2024–25, India saw one of its weakest years for FDI in recent history, with net inflows dropping to just $959 million, down from $10.15 billion in 2023–24. This was despite gross inflows climbing to $80.62 billion.
The decline was driven mainly by two trends: foreign firms repatriated $51.49 billion — 16% more than the previous year — while overseas investments by Indian companies jumped 69% to $28.17 billion. Together, these factors nearly wiped-out India’s net inflows.
India’s export story remains one of resilience and reinvention. The service sector, powered by the rise of AI tools like ChatGPT, is clearly a bright spot. But the investment side of the story still looks uneven — a reminder that technology-driven optimism alone may not bridge the country’s capital gaps just yet.
