India’s outsourced software industry grows 9.5 percent to reach $239 billion

406 points by Nandu_alias_Parthu 17 hours ago on reddit | 98 comments

bambin0 | 16 hours ago

Surprising given the cost performance ratio of ai these days. I can't see the point of trying to keep a bunch of folks in India aligned with your mission when you can do so much in house now.

Flat_Web_7599 | 16 hours ago

I mean if current AI was good enough to replace Human beings at scale then nobody will be having any work. Not just Indians.

SidewaysFancyPrance | 5 hours ago

My company simultaneously spent a ton on AI coding tools and also relocated a lot of work to India, so we have both.

I'd posit that relocating folks to India is how many companies try to handle the AI budget wrecking ball. AI reduces the focus on "we need good, reliable people who stay for a while" and tries to make people replaceable to serve business needs. India is very "business friendly" for all that implies.

I'm expecting to see a lot less hiring in America for software development across the board.

OK_x86 | 11 hours ago

There's a difference between wholesale replacement and assisting to the degree that a single senior person can do the work of many.

With the right tools senior and above usually can do that. The value add of outsourcing the work to teams with dubious quality to save a few bucks is getting smaller and smaller.

involuntarycelibatee | 6 hours ago

“Teams of dubious quality” yeah,sure mate

BuilderUnhappy7785 | 4 hours ago

Indians typically do very rote, relatively low value code, QA, and support work. The type of work that’s perfect for even moderately intelligent LLMs to complete. Plus, have you ever had to work with an Indian team? It’s painful, the cultural divide between them and western business culture is vast.

Shot-Job-8841 | 3 hours ago

I only had one experience, where we outsourced a project and the person we sent to train them was a caucasian female and she reported that they seemed to dismiss her training and advice due to her gender. Which was frustrating since she was the most competent computer engineer we had.

BuilderUnhappy7785 | 2 hours ago

I’ve found that sort of sexism to be fairly commonplace. Female devs almost exclusively in support roles, rarely full stack and I’ve never seen a lead (in India) be female.

Specialist-Roll-3806 | 3 hours ago

ngl this is mostly just reddit cope. this is kinda why the services/outsourcing sector is continuing to grow at double digit rates with out any slow down on the horizon. anyone that actually looks a bit deep into it knows that india's moved away from the support work a long long time ago.

it's similar to thinking china still manufactures dirt cheap, low quality products in 2026. both countries moved ahead in their respective fields a while ago. a lot of the hiring in india is AI/ML specialists, cloud engineers and so on

BuilderUnhappy7785 | 2 hours ago

Reddit cope? I’ve worked directly with Indian dev teams for over a decade. Worked with other offshore teams too, Ukrainian, Romanian, Irish, South American, etc.

The Indian dev/IT outsourcing sector has seen significant growth because US corporate execs have found the tradeoffs in price/work quality to be worth it for lower value IT work.

I don’t give a shit about your prognostications for the future. There’s simply no way that the Indian offshore dev space in particular can survive in its current form. There’s a reason why the running joke has been that AI means “another Indian”.

Indian providers are currently trying to sell themselves as AI enablers. They will probably get some degree of traction with that, but in the end of the day it’s going to cannabalize their own market share, and anyone who has worked with both AI and Indian MSAs will understand how messy it’s going to be to engage these teams at anything but a very basic level for AI implementation.

honpra | an hour ago

>I don’t give a shit about your prognostications for the future.

Is being an asshole a requirement these days?

Specialist-Roll-3806 | an hour ago

sure. your experience and circle jerk interactions on reddit does not trump literal statistics and data. you can keep coping like reddit has for the past 3-4 years. it'll be 2030 and off shoring to india is not going to stop. it isnt even offshoring anymore, companies literally invest in building GCC's and headquarters in india

broadviewstation | 2 hours ago

Hey don’t let your biases get in the way eh, if they were so bad then your whole id industry won’t be run off their backs.

BuilderUnhappy7785 | 2 hours ago

You couldn’t be more wrong. Indians are good enough at rote / low skill software dev tasks. Pre-LLM, this was sufficient to make them valuable for refactor projects, infrastructure, QA, and similar tasks (plus actual IT MSAs of course). It’s pretty obvious that properly deployed LLM based agentic coding platforms are already more capable than Indian teams, so it’s really just a matter of workflow and unit economics now being the single mote that these teams have. As that melts away, the sector is going to collapse.

In not cheering for that outcome. It’s going to devastate a lot of families, and I find that to be heart wrenching. But the reality is what it is, and the tsunami is about to reach the shore.

broadviewstation | 2 hours ago

Hasn’t yet and indit see it happening been hearing that for decades yet the best devs I hire are usually out of Asia not the west

BuilderUnhappy7785 | 2 hours ago

“Best devs i hire are usually out of asia” vs “outsourced indian dev teams and MSPs” are not at all synonymous. You’re comparing apples to oranges. Im not going to claim for a second that there aren’t excellent indian/chinese/etc devs that will work harder and produce better results for less money than an equivalent American or European dev. But most of them will come to either canada (with the intent to make it to the us) or directly to the us on either student visas or h1b visas.

If you’re trying to tell me that the typical outsourced Indian dev team is better than a similar team from the US, you’re straight up lying.

And what’s happened for decades prior to LLMs has not relation to what’s going to happen over the next decade in the new paradigm. It’s happening whether you want to acknowledge it or not: https://www.nytimes.com/2026/02/27/technology/india-technology-jobs-ai.html

garo675 | 16 hours ago

If AI is so cable wouldn't you automate as much as you can with it and outsource the work that cant be automated to a country with low wages

FindingRelevantInfo | 13 hours ago

AI is mostly automating the implementation, not the design. India usually gets outsourced the implementation, not the design.

That's why the expectation is for India and the like to get hit first by the AI software displacement.

MathematicianTop9519 | 13 hours ago

I don't know when this displacement is coming but companies have been outsourcing software work to India harder than ever right now. Not sure they'd be doing that if they planned to replaced them all such AI any time soon.

[OP] Nandu_alias_Parthu | 13 hours ago

Well, India does a lot of design work now too - which is why the expectation of India being hit first by AI has failed to materialize.

FindingRelevantInfo | 13 hours ago

I don't have numbers to back this up but from my experience, implementation is the biggest volume by far, even if some design is happening as well.

myexdrovemecrazy | 9 hours ago

India is known as the back office of the world for a reason. GCCs do less of implementation and more of design.

[OP] Nandu_alias_Parthu | 12 hours ago

From what I've seen at least, a lot of the design work of many American corporations, from Nvidia to Boeing, happens in India.

Sumeru88 | 11 hours ago

Implementation is always the biggest volume in general. But that doesn’t mean design doesn’t happen.

big-papito | 8 hours ago

Culturally, Indian teams will not question the tasks - they will say "yes, Sir" and build what you asked. Not really unique to outsourced teams, but India is probably up there.

broadviewstation | 2 hours ago

But hey, don’t let facts get in the way of casual xenophobia.

Sumeru88 | 11 hours ago

India does full end to end software work from design to implementation to maintenance.

involuntarycelibatee | 6 hours ago

Reddit is mostly american, they don’t wanna lose jobs, so lots of propaganda against indians in these comments

poorleno111 | 4 hours ago

To be fair, it should be a national security concern at a point. India weaponizes outsourcing and immigration. Can’t blame as it’s working though.

broadviewstation | 2 hours ago

Indian software engineers are a security concern, but not an inept administration auctioning the nation off to the highest bidder, par for the course?

poorleno111 | 2 hours ago

Outsourcing large portions if US corp America jobs to India, is the concern. At some point, that will cause issue. They’re a BRICS member too.

broadviewstation | 2 hours ago

Well if you can’t find Americans to do the job at the price you want to pay you can’t do much. Either pay ridiculous wages and make your products / services uncompetitive on a global scale or you source cheaper labour. US corps have to compete globally to make money and they don’t care who does the job they care about price… so if they are Americans for everything they become tok expensive v competition and then no one buys they go Kaputt and no one has a job.

Specialist-Roll-3806 | 3 hours ago

it's not really propaganda as much as it's cope. saying indians are doing the same higher end work like design as you are, for just a fraction of the pay is basically admitting that literally nothing you do is special and your job security is non existent

involuntarycelibatee | 3 hours ago

Thats a great way to put it

dapotatopapi | 8 hours ago

Your viewpoint is about a decade old now.

Indians do everything including design and architecture nowadays.

FindingRelevantInfo | 6 hours ago

I'm not talking about capabilities, I'm talking about volume. Even if Indian software shops can do things end to end, most clients, from my experience, prefer have outsourced implementation guided by in house  leads.

dapotatopapi | 6 hours ago

Again, your experience is either very old, or very closed off and particular (perhaps limited to the various lower grade outsourcing shops).

big-papito | 8 hours ago

So now you will have a bunch of cheaper Indians writing prompts. I actually welcome this move. They are going to absolutely BURY companies in shit code. AI will probably write better code, syntax and correctness-wise, but the way in which things will speed-run in wrong directions will be something to see.

CrayonUpMyNose | 3 hours ago

Unfortunately, most of the money gets blown at green field projects, making the Tatas of the world billionaires. When it comes to cleaning up the mess, all you'll hear is "just a few small changes, sorry budget is only 100k".

wyldstallionesquire | 10 hours ago

It got really weird in our case, we just pay someone there to run Claude for us, essentially.

CrayonUpMyNose | 3 hours ago

The value add will more and more move to formulating the vision and breaking it down for the AI to provide instructions that have a high chance of being executed successfully, implying all the good things like edge-case and test coverage.

You don't really need to be T-shaped anymore, horizontal bar-shaped with good project (self-) management skills is what you need. Where that leaves Indian contracting shops with their hyper-hierarchical management structures, resulting in forced hyper-specialization with correspondingly I-shaped engineers, I don't know.

debris16 | 14 hours ago

>I can't see the point of trying to keep a bunch of folks in India aligned with your mission when you can do so much in house now.

People don't seem to realize this is just one leg in Indian IT. Majority of the growth came from IT service exports from Indian companoes and local start-up expansions.

Khelthuzaad | 13 hours ago

AI needs painstakingly cheap labor for basic inputs for very low pay.Imagine holding the hand for a baby to teach him to use the spoon.

dobik | 13 hours ago

I think the AI industry will have to focus more on optimizing the costs of the AI not the performance. After IPOs it will totally happen. Now before the IPO openAi and Claude are flexing and releasing models Avery month to impress the investors once they will invest it will be harvesting time and lowering the costs and macing the profit. I think once the costs of AI will be low we will see lower entry level jobs being replace.

BoinkDoinkKoink | 11 hours ago

Hardly a surprise. Where do you think the budget for AI comes from? Outsourcing massively reduces operational costs, which frees up capital for AI investments.

Proper-Ape | 8 hours ago

I'm not that gung-ho on AI but even simple flash models are more reliable and useful than these lowest bidder outsourcing companies.

The thing you don't get with AI is real thinking about the design and trusted output. Both qualities I wouldn't associate with these companies.

hinterstoisser | 3 hours ago

AI- Actually Indian :)

solemnhiatus | 11 hours ago

I mean maybe it’s Indians using ai. That’s still cheaper.

omniuni | 15 hours ago

Someone still has to use the AI. Barely skilled people in India is a cheap option.

It's a huge mess.

debris16 | 14 hours ago

> Barely skilled people in India is a cheap option.

Beats the barely skilled, expensive people of America

omniuni | 8 hours ago

We don't hire those.

3_Thumbs_Up | 7 hours ago

I'm betting AI improves an Indian programmers output more than it does an American programmers output.

Glass-Cabinet-249 | 7 hours ago

Why do we need programmers at all of either Indian or American varieties?

3_Thumbs_Up | 6 hours ago

Because human+AI output still beats AI only output.

BiteyHorse | 3 hours ago

Much less paying for Indian programming teams. No surer way to torpedo a project than to get a team in Bangalore involved.

amodmallya | 9 hours ago

Yeah this outsourcing crap needs to stop. Be it manufacturing or IT sourcing. There is no benefit to enriching other countries to make a quick buck. It hurts the country long term

Greedy_Rabbit_1741 | 9 hours ago

It helps the boomers.

More outsourcing it is.

Historical-Edge851 | 4 hours ago

India buys tons of American goods and services fwiw. It's called trade.

morningcipher | 5 hours ago

It's always got to be one of these NRI . The irony is that you doesn’t even belong to the country you are supposedly worried about .

You’re getting hired there in the first place because your labour is cheaper compared to actual people living there . You can’t simultaneously benefit from being the “cheap outsourcing” option and then act outraged that outsourcing enriches India, Mexico or any third world country

Also saw your comment about outsourcing undercutting wages in US . You are doing the same mate . Don't get high and mighty . The moment OP is back in India , he is going to wish for more outsourcing

Super_Mario_Luigi | 5 hours ago

The same people who say this, enjoy the fruits of cheap good made in another country, cheap hospitality immigrant labor, and on and on. But we must mandate that expensive white collar jobs stay here because I want them to

RecognitionOld2763 | 2 hours ago

You don't have to mandate that the jobs stay here but you also shouldn't move all of them out or otherwise unemployment becomes a problem.

honest_arbiter | 4 hours ago

Exactly. The same people that say this shit always cry and scream when they have to buy a shirt for more than $20.

ryuzaki49 | 6 hours ago

Hey I buy American stuff with my outsourcing job.

amodmallya | 6 hours ago

You are not spending your entire gross income on American stuff and besides you are undercutting American wages as the company would have to pay the market rate in America for the same work. Nothing good comes from it.

KarmaTrainCaboose | 3 hours ago

Americans gets cheap goods and services from it.

Specialist-Roll-3806 | 3 hours ago

the vast overwhelming amount of stuff we get as products in the country are due to outsourced manufacturing/mining jobs for terrible wages and safety my man

half-baked_axx | an hour ago

lmao there are not enough engineers in the US to fulfill industry demand. Not even close. Also, the party that agrees with your isolationism is openly dismantling public education so we'll have even less brains in the coming years.

evrestcoleghost | 8 hours ago

Fuck other countries i guess

amodmallya | 8 hours ago

Nope. Let them figure out how to employ their people. Why should another country be responsible for it?

evrestcoleghost | 8 hours ago

Didn't realized the USA federal goverment was employing a quarter million Indians.

FDI Is one of the primordials manners a country grows,how did you think Poland grew so much these last decades?

Americans dont want foreing competition,they dont wont to invest,yet also want cheaper goods,sometimes you people speak as if the world would be better if everyone was poor but you and buying from the USA

amodmallya | 8 hours ago

Didn’t say government. I said country. That means it’s people and businesses.

evrestcoleghost | 8 hours ago

Why should goverments prevent companies to invest in other countries,cause the only other way for the USA to not pay for Indians doing this work Is either paying workers in another country or paying americans themselves,and if anything Is to show off the last few years americans dont want the wages that come of the work

amodmallya | 6 hours ago

Not stopping companies from investing in other countries. Invest there to run the business there. Let all the work pertaining to running the business in a country be done by people residing in that country. Nothing wrong in that.

evrestcoleghost | 6 hours ago

How do you even control that,you want USA laws to prevent branches in India or México for selling goods outside their countries,do you realize how you sound?

amodmallya | 6 hours ago

Every country should decide for themselves. America, Canada and the likes should only have no restrictions on trading raw material and technology. If you want to trade finished goods and services, trade with countries with similar standard and cost of living as you so wages stay in sync with cost of living. And free market works as it’s intended without currency depreciation and labor arbitrage

evrestcoleghost | 6 hours ago

Yeah,that's why the comparative advantages of poorer countries Is their cheaper labour the same labour you want to cut from FDI

amodmallya | 6 hours ago

You realize that the market will adjust accordingly. If businesses can’t find people to hire for the job, they need to raise wages enough that make it attractive to people to do that job. Companies raise prices on products using the same principle to maximize profit. Why not apply the same principle for people as well.

evrestcoleghost | 6 hours ago

Tell me do usa farms pay american 30 dollars an hour to get fruits picked or do they just dont harvest.

How can you see the last few years and not realize americans dont want nor will fill the job gap that migrants left,how many americans do you think are willing to work on farms,phone assembling lines or call centers?

Not enough,the market corrected itself,americans dont work those sectors,they rather have higher wages in more direct sectors.

amodmallya | 6 hours ago

Americans will work. This is an excuse people use to justify outsourcing. People need to work to pay bills. Pay them the true market rate and people will come. And if you don’t find the people then raise wages and if even then people don’t come then spend on automation. And if that does t work then close the business down. There is no god given right for a business to exist at the expense of sending wealth overseas

evrestcoleghost | 6 hours ago

Will americans work 30 dollars an hour for picking fruits,perhaps.

Will they pay that cost when they buy said fruits at 3x times the cost,hell no.

If a sector doesn't work it closes down,but people still want the fruits at the price they want,otherwise there wouldnt be a sector for it,americans want the benefits of cheap labour while despising the workers on it for decades,if it isn't racism it reeks of it.

paper_planes101 | 6 hours ago

Damn you’re right we should do the same for services outsourced from America. Wonder how many jobs that would decimate.

amodmallya | 5 hours ago

The jobs shouldn’t have existed in the first step. Imagine how many jobs it will create in America. The work still needs to be done right?

The owners of this business should not be allowed to benefit from the infrastructure and benefits being in a developed country while bleeding the country dry to make a quick buck. You want the benefits the country provides, pay for it! Do your part. Any business or individual outsourcing goods and services should be treated as a national security threat.

That’s how the Dutch Empire collapsed as the rich Dutch moved manufacturing of ships to England because it was cheaper. What was the result. England became stronger and went to war with the Dutch, defeated them, and became the new superpower.

amodmallya | 5 hours ago

Btw. I’m not even American. I’m an immigrant who became a Canadian citizen a few years ago. Whatever I’ve said applies to Canada as well

kbailles | 9 hours ago

So much this

variegated68409 | 4 hours ago

sir this is called as ignorance,,, outso urcing do the needful and revert back with the same

bippos | 8 hours ago

But think about the bottom line!!!!