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India\u2019s computer services exports have seen a remarkable 30% increase since OpenAI introduced ChatGPT in November 2022, according to Franziska Ohnsorge, Chief Economist for South Asia at the World Bank. Speaking at the Fourth Kautilya Economic Conclave hosted by the Ministry of Finance and the Institute of Economic Growth, Ohnsorge highlighted the significant growth in India’s computer services sector, largely credited to the launch of ChatGPT.<\/p>\n
Recent data from the Reserve Bank of India shows that software service exports reached $47.32 billion between April and June, reflecting a 13% rise compared to the same period last year. In contrast, before ChatGPT’s public release in July-September 2022, these exports were only $36.23 billion.<\/p>\n
Ohnsorge believes India is well-positioned to harness the potential of AI, with the Business Process Outsourcing (BPO) sector quickly embracing this technology. She pointed out that 12% of job listings in BPO now require AI skills\u2014double the rate before ChatGPT’s release\u2014and three times that of other sectors. India ranks 46th on the Oxford Insights\u2019 Government AI Readiness Index, surpassing many emerging economies and approaching the levels of advanced countries.<\/p>\n
India\u2019s service sector is critical for its economy, creating a substantial surplus compared to the goods trade, which faced a deficit of $122 billion in the first five months of 2025-26. However, this deficit is offset by a services surplus of $81 billion during the same period.<\/p>\n
Ohnsorge also noted that while the rise of AI could attract more private investment, overall growth in private capital spending has slowed since the pandemic. She mentioned that India still shows stronger private investment growth compared to other emerging markets, though it may feel slow compared to its own past performance.<\/p>\n
In terms of Foreign Direct Investment (FDI), Ohnsorge expressed concerns about its weakness, despite gross FDI reaching a 50-month high of $11.11 billion in July. The net FDI figure stands much lower at $5.05 billion. This figure accounts for money repatriated by foreign companies and overseas investments by Indian firms. FDI plays a crucial role in indicating economic health and foreign investor confidence.<\/p>\n
Recent trends have shown an uptick in foreign investments after a challenging fiscal year in 2024-25, which saw a decline in net FDI due to increased overseas investments by Indian companies and substantial repatriation of funds by foreign firms. During that year, net FDI totaled just $959 million, a sharp drop from $10.15 billion in the previous year, illustrating the complexities of investment flows in and out of India.
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