Industry body Nasscom sees the Indian IT sector surpassing the $300 billion revenue milestone in FY26. But it’s also expected to witness a reset, with slower employee addition, higher costs, AI-driven growth, code-automation and more. Mint decodes the road ahead:
What is Nasscom’s IT outlook?
The Indian technology industry is expected to grow at 5.1% and add $13.8 billion incremental revenue, taking the total to more than $282.6 billion in FY25, according to Nasscom estimates. In FY26, the tech business will reach a milestone of $300 billion, it said. The coming fiscal will also see more AI-led growth. FY25 was a year of strategic alliance, with growth driven by engineering and research & development and the global capability centres—captive units of multinationals. Around two-thirds of large deals centered around adoption of digital engineering services, expanding into BFSI, healthcare and retail.
What will drive growth in the coming years?
As global enterprises adopt AI, proofs of concept (to show what AI can do) will move into actual rollout. Increased adoption of enterprise software and cloud solutions will continue, boosting growth. While BFSI continues to be the top spender, demand for healthcare & life sciences services is also expected to expand as more companies adopt AI solutions to cut administrative costs and boost efficiency. According to Nasscom, more than 90% of the top 20 services firms are integrating AI, cloud, data, and GenAI, with 10-15% of enterprise GenAI proofs of concept transitioning to full-scale production.
Read more: Weak rupee could pave the way for a long-awaited IT recovery
How will geopolitics impact IT services businesses?
With US president Donald Trump’s MAGA (Make America Great Again) focus, work visas face increased scrutiny. Inward-looking policies will lead to higher costs of services delivery and more onsite work. Trade tariffs could impact speed and costs of delivery. Top-tier players with deep pockets will be in a better position to rejig models than their smaller peers.
Will Indian IT manage legacy and AI systems?
The longer it takes to train the 5.6 million strong IT services workforce to deliver AI services, the tougher it will become to bag these deals. In fact, global majors including Accenture are in a better position. Its GenAI revenue is over $1 billion and on track to exceed $3 billion by the end of this year. Though a lot of global banks, pharma and manufacturing companies are running on legacy systems, which will keep the cash registers ringing for Indian IT services firms, albeit at a lower margin than the marquee AI tasks.
Will GCCs steal Indian IT’s thunder?
The past few years have seen a surge in GCCs. According to the Nasscom Strategic Review 2025, there are around 1,750 GCCs in India employing more than 1.5 million people. By 2030, the count is expected to hit 3,000. While this is great for India as GCCs create local employment, it could impact the work that goes to third-party services providers—Indian IT services companies. Fortune 1,000 companies prefer to keep in-house the proprietary technologies and AI models that they are working on, rather than outsource them.
Read more: Tale of contrasts in tech growth, Nasscom count
