AI to unlock $500 billion opportunity for India`s tech services
Artificial Intelligence will play a decisive role in shaping the future of India’s technology services industry as AI -- particularly the rise of Agentic AI --will unlock $300–500 billion in new opportunities and mark the beginning of a new era where humans and intelligent AI agents work together as hybrid teams, a new report said on Tuesday.
The data compiled by Nasscom in collaboration with McKinsey & Company notes that between 2020 and 2025, the tech services sector witnessed deep shifts -- from pandemic-driven digital acceleration to the disruptive rise of AI and changing geopolitics.
As enterprises now recalibrate their technology spending, AI is emerging as a critical differentiator, with companies expected to direct larger portions of their budgets toward AI-driven productivity and innovation.
While India’s tech services industry is expected to retain its growth edge, revenue expansion will be muted in the near term, with stronger recovery projected between 2027 and 2030.
Legacy service lines may shrink, but demand for data and AI is likely to grow at 12–15 per cent over the next five years.
The report, titled “Future of Technology Services: Leading with AI” also highlights that global capability centres (GCCs) in India will gain greater importance, evolving into global innovation hubs for enterprises.
Rajesh Nambiar, President of Nasscom, said the real future of technology services will be defined by the convergence of human expertise and AI-driven automation.
“Over the next three to five years, we will see hybrid teams reshape delivery models, productivity, and pricing frameworks. India is uniquely positioned to lead this shift, but it will require a major push on reskilling and reinventing service models,” he said.
Noshir Kaka, Senior Partner at McKinsey & Company, added that Agentic AI opens a “once-in-a-generation” growth opportunity but will also require the industry to reset its operating model, invest in R&D, and build talent pools for new skills.
The report concludes that for India to cement its position as the global hub of technology services in the AI era, the industry must defend its core services while rapidly pivoting to AI-driven innovation, new delivery models, and bold partnerships.
