India's Tech Sector Forecast to Reach $315B
India's technology sector is projected to grow 6% to $315 billion in fiscal year 2026, adding an estimated 135,000 jobs. The growth is expected to be driven by IT services, digital transformation initiatives, and increased spending on AI. Industry group Nasscom reports a 2.3% growth in the tech workforce, noting AI is contributing to non-linear employment trends.
- The projected 6.1% growth rate for fiscal year 2026 surpasses the 5.1% growth recorded in the previous year. This forecast follows an upward revision of the fiscal year 2025 revenue from $283 billion to $297 billion. - Revenue from AI-specific services is expected to contribute between $10 billion and $12 billion to the total for fiscal year 2026, as companies move from experimental pilots to scaled deployments with measurable returns. - Exports are projected to account for $265 billion of the total revenue, though the domestic market is expanding at a faster rate of 7.9%, driven by digital public infrastructure projects and enterprise digital transformation. - Key industry verticals showing accelerated growth include healthcare, travel, and transportation, with the Asia-Pacific and Middle East regions emerging as faster-growing geographical markets. - The growth in revenue is increasingly decoupled from headcount expansion; while revenue is set to grow by 6.1%, the workforce is expected to expand by a more modest 2.3% to a total of 5.95 million employees. - To adapt to the influence of AI, the industry has engaged in large-scale upskilling, with over 2 million professionals trained in AI and up to 300,000 trained in advanced AI skills. - Global Capability Centers (GCCs) remain a significant engine of growth, with 70% having defined AI roadmaps and 83% actively investing in generative AI. - A recent NASSCOM and Indeed report suggests that AI is already performing 20-40% of work across various functions in Indian tech companies, with that figure rising to over 40% for software development tasks.
