India’s $283 billion information technology (IT) services industry is navigating one of its most disruptive transitions, driven by rapid advances in artificial intelligence (AI). Over the next two days, industry leaders will converge at the 36th Nasscom Technology & Leadership Forum 2026 to deliberate on the structural shifts reshaping the sector and the strategic responses required.
The timing is critical.
Over the past few weeks, the stock performance of large IT firms has come under pressure as valuations reset following announcements by companies such as Anthropic, which introduced tools that could potentially disrupt traditional application services delivery models.
The Nifty IT index has fallen 14 per cent year-to-date, underperforming the Nifty 50 by 12 percentage points. While third-quarter results led to earnings upgrades for most IT firms, recent AI-led developments have raised concerns about the medium- to long-term growth trajectory of the sector, triggering a derating of up to 27 per cent, according to Jefferies Equity Research. The brokerage observed that stock performance is now likely to be more closely tied to long-term business outlooks rather than near-term earnings delivery.
Yet, industry leaders see this moment not merely as a downturn but as an inflection point. The current disruption, they argue, will also unlock new opportunity pools — provided companies recalibrate their operating models and service portfolios.
Industry growth has slowed to single digits from the double-digit rates seen in earlier years. The sector has set a target of $300 billion by 2025-26, implying growth of about 6 per cent.
According to the Future of Technology Services 2030 report by McKinsey and Nasscom, 13 frontier technologies are set to reshape the world — redefining economies, industries, and societies — while unlocking $25-45 trillion in economic value by 2030.
Adoption is expected to unfold across three overlapping horizons. Between 2025 and 2027, the AI revolution — including agentic AI — is expected to take centre stage as pilots mature into scaled deployments, driving productivity and automation. During the same period, compute and connectivity frontiers— such as semiconductors, advanced connectivity, Cloud and edge computing, and cybersecurity — are expected to accelerate to support the AI wave.
From 2027 to 2030, cutting-edge engineering domains, including bioengineering, robotics, sustainable energy, and mobility, are likely to gain momentum, building on AI and connectivity foundations. Beyond 2030, immersive, quantum, and space technologies are expected to scale, alongside broader convergence across these frontiers, setting the stage for the next wave of global transformation.
For service providers, this presents a fresh set of opportunities — developing solutions around frontier technologies, enabling adoption at scale, and positioning themselves as trusted partners helping enterprises reimagine their businesses.
Rajesh Nambiar, president of Nasscom, said in a recent interaction with Business Standard that productivity and performance have improved. “When we look at traditional IT services environments — where most IT services firms operate — the reality is very different. These are highly complex, deeply embedded systems. Client environments typically involve legacy infrastructure, regulatory obligations, fragmented databases, cybersecurity requirements, and integrations across multiple internal and external systems. This is precisely where services companies add value by integrating, modernising, building microservices, and stitching together disparate systems.”
He added that assuming new-age tools such as Claude Cowork or similar agentic systems can simply “plug and play” and replace this complexity is misplaced.
At the recently concluded Infosys Investor AI Day, the company said the AI services opportunity is estimated at $300-400 billion.
 "Indian IT at major crossroads as rapid AI shift reshapes sector outlook")
