Services Exports Decline In September

Chennai: Services exports, which have been consistently growing for a long time, declined in September. Subdued growth in the IT sector seems to have hit services exports.

India's services exports fell 0.87% year-on-year to $36.35 bn in September 2026 against $36.67 bn in the same month last year. The industry is worried whether this could be a signal of weak exports going ahead.

IT services, which account for around 42 per cent of the services exports, seems to have led to the decline. Recently Jefferies had estimated the September quarter revenue growth of top six IT firms to be 0.7% to 3.5%. According to brokerage firms, AI-based technology is forcing companies to rejig business models and offer steep discounts.

“Generative AI tools and automated workflows are shrinking billing hours and contract sizes across entry-level programming, software maintenance, and traditional IT-enabled/BPO services,” finds GTRI. Ongoing inflation and elevated interest rates in the US and Europe have led global Fortune 500 clients to slash discretionary IT budgets, defer non-essential digital transformations, and emphasize cost-optimization contracts.

The US, European Union and the UK account for a large portion of India’s IT services. Multinational companies also have been moderating Global Capability Centre (GCC) hiring by prioritizing internal AI productivity. Reports suggest that GCCs have been laying off employees in recent months.

In the case of business services exports, geopolitical conflicts, shipping disruptions, and heightened regulatory checks on cross-border data delivery add operational friction to non-IT exports like transport, logistics, and legal/financial consulting, said GTRI.

Services exports had touched an all-time high of $421.3 billion in FY26 and have grown 8.69% between April–September.