India's IT services industry, long the backbone of the country's technology exports, is entering a period of profound disruption as artificial intelligence reshapes how software is built, deployed, and monetised. Experts say while AI presents massive opportunities, India will need significant capital, long-term strategy, and infrastructure investments to remain globally competitive.
The shift is already influencing investor sentiment. Brokerages such as Citi and UBS have flagged concerns that advances in AI — particularly agentic AI and automation — could compress valuations, disrupt traditional outsourcing models, and alter long-term growth expectations.
Threat Today, Opportunity Tomorrow?
Sanjeev Bikhchandani, founder of Info Edge, described AI as a double-edged sword for India's technology ecosystem.
“AI represents both a threat and an opportunity,” Bikhchandani told NDTV Profit, adding that while disruption is inevitable, legacy systems will take time to transition. He said India's AI play is likely to turn decisively positive over the next five years, even as the direction of change remains uncertain in the near term.
Despite the uncertainty, Bikhchandani emphasised AI's productivity potential and its ability to unlock new markets. At Info Edge's Naukri platform, AI has already helped serve underpenetrated segments more efficiently, demonstrating how automation can expand access rather than simply replace jobs.
But building foundational AI capabilities will require deep financial backing. “India needs a lot of money to build large language models,” he said, suggesting public sector banks and government support could play a key role in financing such efforts.
ALSO READ: Brokerages Turn Cautious On IT Over AI Fears — Which Stocks Still Make The Cut?
From IT Services to AI Infrastructure
The challenge is not just technological, but structural. Moshe Katri, Managing Director at Wedbush Securities, said the market is now shifting focus toward AI infrastructure and measurable performance outcomes.
“AI infrastructure will be the key focus area now,” Katri told NDTV Profit, adding that technology firms must convince investors of their transition toward performance-driven, AI-enabled business models.
This represents a fundamental shift from labour-intensive outsourcing toward capital-intensive computing infrastructure, including data centres, specialised chips, and proprietary AI models.
Strategy To Define India's Competitive Position
Ganesh Natarajan, Chairman of Honeywell Automation India, said India must take a more strategic approach to remain relevant in the global AI race.
“India has been an excellent application provider,” Natarajan told NDTV Profit, noting that while 80% of global companies have already experimented with AI, India must now evolve beyond implementation to innovation.
He expects double-digit growth in IT over the medium term but cautioned that markets may see near-term sacrifices as companies invest in new capabilities.
Experts agree the disruption will be gradual, not sudden. Regulation, business models, and enterprise adoption typically lag behind technological breakthroughs, allowing time for companies to adapt. Bikhchandani also emphasised that large IT services firms are likely to navigate the transition successfully, even as the industry evolves.
ALSO READ: Infosys Signs Pact With Anthropic To Collaborate On AI Using Claude
Essential Business Intelligence, Continuous LIVE TV, Sharp Market Insights, Practical Personal Finance Advice and Latest Stories — On NDTV Profit.
