India IT’s Make-Or-Break Moment

From Code Crunch To AI Rush: IT's Make-or-Break Moment

By Govindraj Ethiraj

Right now, two distinct conversations are happening around artificial intelligence in India.

The most pressing: What will be AI’s impact on the country's $283 billion IT services industry? Because this sector is the undisputed engine of middle-class job creation, it is a massive hot-button issue. The second conversation is more functional: How can enterprises and governments harness AI to actually become more productive and efficient?

Over 1,000 attendees have gathered at the Nasscom Technology Leadership Forum 2026 in Mumbai this week to debate exactly this. The headcount is the same as previous years, but the atmosphere is decidedly more tense.

Indian IT companies — the backbone of the nation’s tech ecosystem — are under a harsh spotlight. It has already been a gruelling week, coming on the heels of the India AI Impact Summit 2026 in Delhi, an event one attendee accurately summed up as the "Kumbh Mela of IT conferences."

The information technology industry is undoubtedly going through a “painful transition” due to AI, but writing its obituary is wrong, C Vijayakumar, CEO and Managing Director of HCLTech, said during an opening session on Tuesday morning.

His acknowledgement of this painful transition is welcome. "CVK," as he is widely known, deserves credit for his candour — mirroring the warnings he gave last year about impending tectonic shifts in the sector.

“I think the industry is going to reinvent itself," he noted. "This time, the inflexion is really making a lot of what we do, or people do, capable of being done a lot more efficiently and with significant speed. I think this transition is different from other transitions. It will be painful as it involves people, but there is a promising road ahead.”

The Silver Lining In The Data

The good news is that despite all the upheavals, the industry is still projecting growth. Nasscom estimates industry revenue will hit $315 billion in FY26—a 6.1% increase—led by broad-based expansion across key segments.

Crucially, AI revenue —the metric every investor is aggressively tracking — is estimated to land upwards of $10 billion to $12 billion in FY26, reflecting a clear shift from pilot projects to scaled, ROI-driven deployments.

Furthermore, while AI-led transformation has accelerated, the industry has managed to remain a net hirer. Headcount increased by 2.3%, and some 2 million professionals were upskilled in AI, including 200,000 to 300,000 in advanced AI capabilities.

When we think of Indian IT, we traditionally think of the legacy services giants like TCS or Infosys. But the real growth engines right now are Global Capability Centres (GCCs) — the captive tech units for large multinationals — which have significant headroom ahead. Niche segments are also achieving critical mass; Nasscom notes that cybersecurity, data analytics, cloud, and "GCC-as-a-service" are becoming increasingly embedded across multiple sectors.

Geographically, APAC and the Middle East are leading the growth, while the domestic market continues to hold strong. Meanwhile, GCCs have driven major gains in emerging sectors such as healthcare, travel, and transportation.

Beyond The Bottom Line

While there is undeniably a "doom and gloom" narrative hanging over legacy coding jobs globally, there is also a fair bit of genuine optimism regarding what AI will deliver to everyday enterprises.

Akhilesh Tuteja, Head of Clients & Industries at KPMG India, told me on the first day of the forum that AI has essentially disconnected productivity from profitability.

“In the past, you say if there's a productivity gain, it should translate into a profitability gain," Tuteja said. "Now, productivity is driving experience. So I feel better doing my job. Even though that may not translate to the bottom line of the company tomorrow morning, it makes me stick to my job, doing better things.”

For Tuteja, large language models are one instance of how AI has much promise for India. Historically, the vast majority of digital content on the internet has been in English—a language that does not represent the reality of the broader Indian population. Because of this barrier, millions of people have remained effectively disconnected from the digital world; even if they had smartphone access, they had nothing localised to consume.

With AI, seamless, real-time translation is finally a reality.

“I'm sure when we are having this recording, you just need to press a button, and my voice will come out in any language," he told me as the cameras rolled. "So you certainly have amplified that consumption range from 1 to 10, because 90% of the people never had the access.”

The Bottom Line: If AI's first act in India was inciting fear in the boardrooms of legacy IT firms, its second act might just be giving a voice—and an internet—to the next billion users.

And that is a transition well worth the growing pains.

The Pioneer presents India Finance & Innovation Forum 2026 convenes policymakers, regulators, financial institutions and industry leaders to examine India’s evolving financial architecture. Over three days, senior decision-makers will explore fiscal and monetary priorities, capital markets, digital finance and innovation-led growth through focused dialogue, networking and collaborative sessions on what’s changing, what works and what comes next.

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