AA Edit | AI Reshapes, Not Shrinks Indian IT

Over the last couple of years, Artificial Intelligence has been touted as the greatest disruptor of jobs, the economy and the way people operate. Of these, it was considered the biggest threat to the information technology sector, one of India’s main export staples, because its success was primarily dependent on cost arbitrage.

Recent revenue data, however, paints a somewhat reassuring macro picture. India’s frontline IT services firms — Tata Consultancy Services, Infosys, HCLTech, Wipro and Tech Mahindra — have closed FY26 with stable profits, signalling that the worst of macroeconomic headwinds may be receding.

At the more granular level, companies are adapting to the new AI era by decoupling revenue from human effort. They have reported an increase in AI-led productivity even as gains are compressing billing volumes in legacy services — a model that sustained Indian IT for decades.

The AI-native deals are already translating into a multi-billion-dollar market. With projections of a $300–400 billion AI-led opportunity by 2030, the Indian IT sector is not shrinking; it is just being redefined.

As AI reduces the need for repetitive coding and maintenance work, the industry’s workforce pyramid, which has historically been broad at the base, will narrow. According to a survey, 80 per cent of business leaders say they would prefer a less experienced candidate with AI skills over a more experienced one without them.

Though Indian employees are worried about the threat of AI, a survey shows that they are adapting to new changes in the job market quite well. It also shows that 92 per cent of Indian knowledge workers already use AI at work, and the subject is being introduced at the school level to make children AI-ready.

India, in general, and the IT sector in particular, have weathered many crises before. But this moment is different. It is not about surviving disruption — it is about reinventing ourselves.