Indian IT has underperformed in 2026. Weak demand and AI-driven disruption have weighed on investor sentiment
AI is automating routine services, challenging the cost-arbitrage model that powered India's IT growth
Demand for freshers has weakened as AI coding tools reduce the need for entry-level talent
AI improves efficiency, but clients expect lower costs, keeping margins under pressure
Global capability centres are expanding, with firms increasingly building technology teams in-house
Long-term growth depends on how quickly Indian IT firms adapt, innovate and build AI-led services