UN Projects India's Economy to Grow 6.4% This Year, Tech Industry to Be Key Engi

Mon, 01 Jan 0001 00:00:00 +0000

Why Can India’s Tech Industry Grow Against the Trend Amid US Tariff Barriers?

The answer lies in the rapid transformation of its industrial structure. When traditional merchandise exports were hit, India’s service exports and digital economy took over as the main growth drivers. This is no accident but the result of a decade of “Digital India” policies, a vast STEM talent pool, and a vibrant startup ecosystem working in tandem. US tariff pressure has, in fact, accelerated India’s qualitative shift from the “world’s back office” to a “global innovation hub.”

In 2025, India’s merchandise exports to the US declined by 25% due to tariffs as high as 50%, a heavy blow to any economy. However, during the same period, India’s service exports, particularly in IT services, cloud solutions, AI consulting, and R&D outsourcing, maintained double-digit growth. Behind this are two key shifts: First, companies are “localizing” supply chains. Many consumer electronics and ICT products previously manufactured in China for export to the US are now being produced in India, directly serving local and neighboring markets to circumvent tariffs. Second, Indian tech companies have upgraded from a simple “cost center” outsourcing model to “value co-creation” strategic partners, directly participating in clients’ AI model training, data platform construction, and core digital transformation projects.

UN Report on SoloSoft

UN Projects India's Economy to Grow 6.4% This Year, Tech Industry to Be Key Engi

Why Can India’s Tech Industry Grow Against the Trend Amid US Tariff Barriers?