Indian IT Sector May Show Resilience Amid Uncertainty

The world economy is transitioning as the Trump administration comes up with several strict trade-related measures. Despite this uncertainty, IT industry body Nasscom's projection of the Indian IT industry's growth rate is encouraging. Nasscom's Annual Strategic Review 2025 mentioned that the Indian IT sector is projected to grow by 5.1 per cent to reach revenue of $282.6 billion by the end of March 2025. It means the ongoing financial year will see an incremental revenue addition of $13.8 billion.

For the next financial year, the growth rate of the Indian IT industry is projected to be better than in FY25. According to the industry body, the Indian technology industry is likely to reach a revenue milestone of $300 billion in FY26, reflecting 6 per cent increase over FY25. This projection shows optimism among Indian IT services providers despite the ongoing uncertainty coming out of the US market. Importantly, the report throws some interesting facts that indicate the resilience of Indian IT industry.

Firstly, GCCs (Global Capability Centres) are increasingly playing a significant role in the Indian technology landscape. The revenue generated from these GCCs now constitutes half of the total Indian IT industry's revenue. Secondly, job addition in the Indian IT industry continues at a sound pace despite all the disruption created through AI and generative AI solutions. The IT workforce in India is expected to grow by 1.26 lakh to reach a total of 58 lakh employees by the end of FY25, according to Nasscom. Such facts and projections augur well for the Indian IT industry. However, there are some warning signs for sure. Recently, HCLTech's CEO, C Vijayakumar's commentary on the impact of AIon hiring invokes curiosity. According to reports, HCLTech's head has said that automation is leading to reduced demand for entry-level IT employees. This means fresher hiring in the coming days is likely to suffer. However, he reportedly pointed out that there is a growing demand for specialised skills. So, if engineering graduates skill themselves in cutting-edge technologies, then there is no dearth of good jobs.

The good news is technology firms are willing to pay more for these specialised skills. Moreover, some technology leaders have also pointed out that the traditional business model of Indian IT firms is likely to change in the coming years. Though there are two schools of thought in this matter, no doubt it's an evolving space. In the coming quarters, it will be clear what kind of impact AI wave is going to make on the Indian IT industry's legacy models. Meanwhile, some analysts pointed out that more AI-powered applications augur well for Indian IT firms.

These AI-powered platforms and solutions will require servicing and maintenance. And Indian IT firms are best placed to serve these clients. Notably, Indian IT services & engineering services companies have already taken the lead in the AI space through collaboration with global majors. Several of these firms have collaborated with chip giant, Nvidia in setting up centre of excellence. They are also aggressively upskilling their employees in key AI skills. Against this backdrop, the Indian IT industry is likely to show its resilience in the current AI landscape.