India's technology services industry is generating an estimated $10-12 billion in revenue from artificial intelligence services, according to industry body Nasscom. As reported by PTI, nearly 25% of technology services companies have moved AI experiments into production, marking a significant shift from pilot projects to operational deployment. The industry has built substantial capabilities with more than 2 million professionals skilled in AI and 1,00,000 to 2,00,000 trained in advanced AI capabilities. Nasscom President Rajesh Nambiar emphasized that as AI moves into production, enterprises will need specialist partners to deploy and scale the technology responsibly, highlighting the growing need for experienced IT service providers. According to the Nasscom US CEO Forum held in New York City, the technology services sector will continue to remain relevant to global enterprises' transformation in the AI era, even though there will be changes in how services are delivered and scaled.
According to Nasscom, around 85% of technology service providers now have agentic AI platforms, indicating widespread adoption of advanced AI technologies. Industry leaders speaking at the Nasscom US CEO Forum in New York emphasized that AI is creating fresh growth opportunities rather than replacing traditional IT work. The technology is expected to bring productivity gains while expanding demand for technology orchestration, data readiness, application modernisation, AI governance, cybersecurity, and agent management. Cognizant CEO and Chair of the Nasscom US CEO Forum Ravi Kumar S. noted that the next phase of AI requires converting AI capability into production value through data readiness, workflow redesign, secure deployment, governance and change management. As reported by Business Standard, the impact of AI on technology services cannot be assessed only through the lens of task automation, with AI expanding the addressable market opportunity across enterprise modernisation, data, AI governance and intelligent operations.
The AI revolution is fundamentally reshaping India's $300 billion IT services industry, with marquee stocks including Infosys, Wipro, TCS and HCL crashing from their historic highs. The Nifty IT index is down 29% so far this year up to June 29, reflecting investor concerns about the industry's traditional business model being disrupted. At TCS's 31st annual general meeting, Chairman N Chandrasekaran stated that the next three years will see as many human employees as AI agents. Infosys Chairman Nandan Nilekani told shareholders at the 43rd AGM on June 23 that "AI will not replace a company like ours. It will amplify those who move with purpose and adapt with speed," with the company working with 90% of its top 200 clients on AI initiatives. Mphasis CEO Nitin Rakesh noted that 64% of new total contract value wins during the latest quarter were AI-led, with overall deal wins jumping 68% year-on-year to $2.1 billion.
Despite widespread AI adoption, many enterprise AI projects remain stuck at the pilot stage according to recent reports from Nasscom and Deloitte India. As per Atul Arya, founder and CEO of Blackstraw, meaningful ROI usually emerges between six to 12 months, and projects that stall lose executive support around the same six-month mark. The Nasscom Community report identifies poor-quality data, legacy technology systems, weak governance, unclear business objectives and limited organisational readiness as the biggest barriers preventing AI from scaling. Organisations frequently underestimate the amount of work needed to integrate AI into existing operations, with many discovering that supporting systems, data pipelines and governance frameworks are not ready for large-scale use. Vijay Gopalakrishnan, Partner at Deloitte India, emphasizes that choosing the right business use case and assessing technology feasibility at the outset are critical to successful AI adoption.
The industry body expects Agentic AI to unlock an additional $300-400 billion addressable market for technology services by 2030, with Infosys estimating the AI-first services market opportunity could reach this figure. EY India's technology sector leader Nitin Bhatt noted that "the IT services model is shifting from scaling effort to scaling intelligence," with AI improving productivity across software development, testing, maintenance and IT operations. Mphasis CEO Nitin Rakesh observed that "the conversation with clients has moved from effort to outcomes, with boards asking for AI return on investment." The change is already visible across the delivery stack, with Tech Mahindra reporting that 70% of engagements incorporate AI in some form. Services providers are investing heavily in proprietary AI platforms rather than relying solely on third-party models, with Infosys having Topaz, Wipro having ai360, and Mphasis having Tria. Companies are also collaborating across the AI ecosystem, with Capgemini forming strategic alliances and OpenAI Deployment Company (DeployCo) joint ventures to embed AI coworkers directly into corporate workflows.
