On Friday, September 18, 2026, the Reserve Bank of India released the final results of its annual Survey on Computer Software and ITES Exports, and the numbers read like an unambiguous success story. India's total software and ITES export services, including those delivered through foreign affiliates of Indian companies, rose 9.5 percent in FY2025-26 to touch $239.3 billion, according to data released by the RBI on Friday, the wire agency IANS reported. Narrow the lens to services sold directly, without routing through an overseas arm, and the story still holds: software services exports alone, excluding sales through overseas commercial presence, grew 8.2 percent year-on-year to $221.4 billion. Read only the top line, and FY2025-26 looks like India's best year yet for selling software and IT-enabled work abroad.
It is worth slowing down on that top line. Deep inside the same survey sits a table that breaks the total into its constituent parts, and one row runs the other way. Software Product Development, the category that captures India's sale of its own software as a finished good rather than services rendered, fell from $6.8 billion (a 3.3 percent share of software exports) in FY2024-25 to $6.4 billion (a 2.9 percent share) in FY2025-26, even as the overall total grew 9.5 percent. It is the only sub-category in the RBI's own table to shrink in dollar terms in FY2025-26. Everything else grew. Product Development alone went backward.
A record built on services, not products
The RBI's own compilation shows why the product dip barely dents the headline number: product exports are a small slice next to the services that dominate the total. Computer services made up more than two-thirds of India's total software services exports in FY2025-26, with BPO services the dominant component on the ITES side of the ledger. Software Product Development's $6.4 billion sits inside a services base measured in the hundreds of billions.
That base has been climbing for years. Total software and ITES exports, including foreign-affiliate delivery, rose from $200.6 billion in FY2022-23 to $205.2 billion in FY2023-24, and from there to this year's $239.3 billion: up about a sixth over two fiscal years. Software is not the only export line climbing either. India's total services exports, across every category the RBI tracks, reached a record $421.3 billion in FY2025-26, and telecommunications, computer and information services was the single largest contributor at $206.6 billion, a 49.03 percent share.
Against a base that size, a $400 million product-line decline barely moves the total. But that size is exactly why the one line that did shrink is worth isolating. It is the closest thing in the RBI's own taxonomy to a scorecard for India selling software it owns outright, as opposed to selling the hours of the people who write it.
Where this year's growth actually came from
The United States remained India's largest software-export destination in FY2025-26 with a 54.1 percent share, ahead of European countries at 31.8 percent, of which the UK took 15.4 percent. That 54.1 percent figure is a recovery, not a new high. A year earlier, the US share had slipped to 52.9 percent from 54.1 percent in FY2023-24, RBI's FY2024-25 survey found. This year's figure puts the US back exactly where it stood two years ago.
This is a specific kind of good year: the client-country mix snaps back toward one dominant buyer, while the single category built to measure India's own software shrinks. It says India sold more hours of outsourced work, largely to the same customer base it has long depended on, and sold fewer complete software products of its own.
The honest objection
The strongest case against reading anything into this is scale. The Software Product Development decline is $400 million on a total software and ITES export base of $239.3 billion: a rounding error, not a trend line. Computer, telecom and information services alone brought in $206.6 billion, the largest single contributor to India's record $421.3 billion in total services exports, and IT services broadly remain by far the country's strongest export earner regardless of what one small sub-category did in a single year. A sector this large, the objection runs, should be judged on its dominant lines, not its smallest one.
That case understates what the smallest line actually measures. Every other sub-category in the RBI's survey grew in FY2025-26, alongside the 9.5 percent total; Product Development is the sole exception, and it happens to sit closest to the question of whether India is selling engineering hours or selling finished software it owns. A $400 million dip inside a $239.3 billion total may not move the aggregate. It is still the one number in the table that ran against the year everything else had.
The Signal
India's software exports had, by any headline measure, a record year: $239.3 billion, up 9.5 percent, with the US client base back to a 54.1 percent share and computer and telecom services the single biggest line in the country's entire services-export book. None of that is in dispute. What the RBI's own table adds is a footnote that complicates the record: the one category built to measure India selling its own software, rather than the hours of the people who write it, shrank from $6.8 billion to $6.4 billion while every other line got bigger. Watch that single row in next year's survey. If Software Product Development keeps shrinking while total exports keep setting records, the growth story will have finished separating an outsourcing boom from a product one, however large the headline number gets.
Reporting basis: the FY2025-26 Software Product Development decline and export composition are from the Reserve Bank of India's own Survey on Computer Software and ITES Exports, published September 18, 2026; the FY2024-25 and FY2023-24 US-destination-share and total-export figures are from RBI's own release of the FY2024-25 round and the FY2023-24 round. The record $239.3 billion total, the $221.4 billion services-only figure, the FY2025-26 US and European destination shares, and the computer-services and BPO composition are all drawn from that same RBI survey as carried by the IANS wire, reported here via ianslive.in, English Punjab Kesari, Ommcom News and The Right News: one origin recarried four times. The $421.3 billion total services-export figure and the telecommunications, computer and information services share are from the Ministry of Commerce and Industry's reply in the Rajya Sabha, citing RBI data, via the Press Information Bureau. The two-year growth figure and the dollar-value product-line decline are The Signal's own calculations from those figures.
