“Technology is a useful servant but a dangerous master.” – Christian Lous Lange, Nobel Peace Laureate
Global headwinds hit Indian IT
India’s $283-billion IT services industry, long known for resilience, faces its most uncertain phase in years. Tariffs, visa curbs, and geopolitical conflicts have slowed down digital transformation projects and delayed new contracts. Roughly $350-400 billion worth of deals have been impacted due to trade restrictions from the US and EU.
Demand softens amid AI transition
Even as global clients explore automation and AI, spending on traditional IT contracts has dropped. Discretionary budgets are being reallocated to generative AI and cybersecurity. Average deal values and durations have shortened, with contract renewals now lasting three to four years instead of the earlier eight to ten.
Sector resilience under strain
While BFSI, healthcare, and telecom continue to invest, manufacturing and retail have witnessed the sharpest slowdowns. New EU tariffs on software exports and delayed project approvals are adding to the uncertainty. Still, firms are betting on AI-driven cost savings and productivity gains to navigate the turbulence.
Industry adapts with AI innovation
Top Indian players like Infosys, Wipro, and Tech Mahindra are embedding GenAI into service delivery. Platforms such as Mphasis’ Next and TechM’s Orion aim to automate coding, data migration, and complex tasks. These AI-led efficiencies are expected to create new client value, even if short-term growth remains muted.
The cautious outlook
Analysts project a modest 3–5% growth for FY26, compared with earlier double-digit expansions. Companies are restructuring operations and re-skilling talent for a world increasingly defined by AI, cybersecurity, and digital sustainability.
Summary
India’s IT industry is facing a rare slowdown, driven by tariffs, visa barriers, and global uncertainty. While traditional IT contracts shrink, AI innovation and digital transformation may cushion the blow. Long-term survival depends on adaptability, cost control, and continuous reinvention.Food for thought
Can India’s IT industry reinvent itself fast enough to thrive in an AI-first global economy?AI concept to learn: Generative AI
Generative AI refers to systems that can create new content—like text, code, or images by learning from existing data. In IT services, it is transforming software development, documentation, and customer engagement by automating complex, repetitive tasks and improving creative productivity.
[The Billion Hopes Research Team shares the latest AI updates for learning and awareness. This is not a professional, financial, personal or medical advice. Please consult domain experts before making decisions. Feedback welcome!]
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