India’s IT industry has evolved into a global powerhouse, delivering cutting-edge technology services and solutions across industries. Now, with the rapid advancement of artificial intelligence, the sector stands at the cusp of a new era, one defined by innovation, agility, and exponential value creation.
AI is emerging as a powerful catalyst for growth, unlocking new opportunities for Indian IT firms to lead globally in areas such as automation, data analytics, and intelligent platforms. According to the Nasscom Annual Strategic Review 2025, the industry is projected to reach $300 billion in revenue by FY2026, up from $268.8 billion in FY2024.
This momentum is further reinforced by AI’s economic impact. A recent IDC report estimates that AI spending could contribute over $115 billion to India’s economy by the end of 2027, underscoring its role in shaping the future of technology services.AI is a game changer for Indian IT
AI is already transforming the Indian IT industry in several ways, from enabling service delivery automation to driving cost optimization. AI is also helping drive smarter AI-infused offerings such as predictive maintenance, smart analytics, and cognitive computing. These developments have the potential to transform India into a high-value AI-powered innovation hub.
Critical success factors for making AI a growth driver for Indian IT
While India is well-positioned to lead the AI-first era, making strategic investments in infrastructure, talent development, and industry collaboration will be the critical to making this vision a reality.
For Indian IT companies to effectively use AI as a sustainable growth driver, they need to go beyond adoption and embed AI across strategy, culture, services, and talent. This requires effort on several fronts. For instance, it calls for a strategic shift towards building an AI-first mindset, where AI is viewed not just as a tool, but as a core value creator. Creating intellectual property through proprietary AI frameworks, platforms, and accelerators is also critical. Additionally, a shift from FTE-based thinking to outcome-based delivery using AI is much needed.
India is already home to one of the largest pools of AI and data science professionals, serving clients across the globe. However, a significant portion of the workforce remains focused on legacy systems, highlighting the urgent need for large-scale talent transformation. To stay competitive and meet evolving global demands, engineers must be equipped with skills in machine learning, data science, generative AI, MLOps, and ethical AI. AI-specific programs, ranging from university curricula to industry certifications, will play a crucial role in ensuring that India continues to grow as both a leading employer and deployer of AI technologies.
The industry must play a role too. For instance, Cognizant Foundation’s Tech4All initiative aims to skill women and persons with disabilities in India for careers in technology and technology-enabled services. Similarly, Cognizant’s training initiative, Synapse, is working to empower over one million individuals with cutting-edge technology skills such as GenAI.
In addition, strong ecosystem partnerships with hyperscalers, AI start-ups, and co-innovation with clients can accelerate the time-to-market for cutting-edge AI services. To explore options like revenue-sharing or performance-linked contracts for AI implementations, IT companies must work to reconsider their client engagement approaches.
An emphasis on responsible AI governance is crucial. For instance, building explainability, bias mitigation, and fairness into AI systems as well as ensuring compliance with global regulations, are non-negotiable. India is already taking steps to promote ethical and inclusive AI. For instance, India’s National AI Strategy (part of NITI Aayog) promotes AI for social good and is gaining international attention. India also chairs AI-related forums in BRICS, G20, and GPAI (Global Partnership on AI).
India’s IT industry has already proven itself as a global leader. With AI at its centre, it is positioned to shape the next era of digital transformation. Backed by a rapidly improving digital infrastructure and deep reserves of emerging talent, India is ready to accelerate growth by embracing AI and ensuring that it remains globally competitive and future-ready.
The author is Achal Kataria, Vice President & India Country Head, Cognizant.
Disclaimer: The views expressed are solely of the author and ETCIO does not necessarily subscribe to it. ETCIO shall not be responsible for any damage caused to any person/organization directly or indirectly.
