Indian ITeS Industry and GenAI Conundrum as adoption remains under 40%

According to the latest BCG report 'The GenAI Adoption Conundrum', over 80 per cent of developers acknowledge its advantages, citing increased productivity and efficiency

India’s IT enabled services (ITeS) industry is at a defining crossroads. While generative artificial intelligence (GenAI) could be India’s next trillion dollar opportunity, Indian developers have to adopt it for this to happen.

 

According to a study, despite over 80 per cent of developers recognising GenAI’s benefits, adoption lingers below 40 per cent.

 

According to the latest Boston Consulting Group (BCG) report ‘The GenAI Adoption Conundrum’, over 80 per cent of developers acknowledge its advantages, citing increased productivity and efficiency. But even with all-pervasive benefits, proficient adoption of these tools is still at paltry figures.

 

“This is the GenAI adoption conundrum — where the benefits are visible, but proficient adoption still remains below 40 per cent” said Sambhav Jain, MDP at BCG. 

   

“It’s like being handed a Formula 1 race car — but choosing to walk instead. Contrary to further belief that GenZ is the GenAI generation, we observed that proficient adoption among GenZ dipped even further to 31 per cent,” Jain added.

 

What ails this adoption is integration issues and inadequate enablement. Jain said while every company says it is training employees, this training is not focused on GenAI.

 

“Training today is broad but lacks depth — almost half the developers reported being unaware of how to fully utilise the tool’s capabilities in their workflow. Clients are skeptical, too, and require clear value proposition & security measures,” said Rajiv Gupta, managing director (MD) & senior partner, BCG, in a conversation with Business Standard.

 

At a time when AI and GenAI have been the focus area for clients, the Indian developers’ inability to be prepared can cost the industry a big opportunity.

 

“This conundrum represents a missed opportunity for Indian IT services. It’s not just about access — scaling is about behavior change, process transformation, and leadership. Many companies have begun their AI journey — running POCs, experimenting, and seeing early success. Organisations that are getting this right are leveraging a structured adoption playbook,” he added.

 

To break free from this conundrum, India’s IT firms must move beyond experimentation and into full-scale adoption. BCG’s report outlines a five-part playbook for success; it asks organisations to train for impact, not just awareness – GenAI adoption jumps from 16 per cent to 48 per cent when developers receive five or more targeted training sessions.

 

Two, 92 per cent of enterprise clients are willing to pay a premium for AI-driven services, but they need proof of tangible return on investment. Three, firms must track productivity gains scientifically — measuring AI’s impact across efficiency, quality, and output.

 

Change management is a huge part of this adoption. Addressing psychological resistance among developers is also important.

 

Finally, setting up centres of excellence (CoEs) is impactful. Almost 80 per cent of firms with GenAI COEs have seen marked improvement in training, better resource access & regular scientific tracking.

 

“GenAI’s momentum is at the bottom of the hockey stick effect — what we do next will define our trajectory. We are at a critical inflection point where Indian ITeS must lead with conviction, scale GenAI with urgency, and earn the right to shape the future of AI-powered services. The choice is clear: we either embrace this transformation and cement our global leadership, or hesitate, lose ground, and fade into irrelevance,” said Gupta.