India’s IT Industry Faces Structural Shift Amid AI Disruption and Slowing Growth:

India IT Industry is now facing FY25 with it’s second consecutive year of slow or stagnant growth at a measly single-digit mark. After everything the pandemic put us through, we were able to meet tho, its only temporary relief because now there is clearly an underlying issue. Experts have suggested that India’s revenue country simply cannot megenerate ROI paradigm has become more structure rather than cyclical.

The Indian IT sector, boasting 280 billion dollars, is now tackling multiple issues at once including the post-pandemic demand drop for digital transformation digital, are GCCs located in various parts of the globe GNCs, raising the importance of AI Geopolitical tensions, today’s Macroeconomic climate all these crosswinds not just “creeping” but also severely impacting the economy.

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Revenue Growth is Slow for All Major IT Companies

The results of leading players in systems integration and information technology were in-sync with expectations. TCS and Infosys managed to achieve only 4.2% growth as Wipro registered a dip in their growth rate to -2.3%. This is a steep fall from the prior FY23 where growth ranged from 11% to over 25%.

AI Improvement of Industry Activity

A considerable focus has been placed on Artificial Intelligence, yet its overall economic benefits are very minimal. Gaurav Vasu, CEO of UnearthInsight, states that most AI contracts are currently peddling proof of concepts worth $1-5 million for a duration of 6-8 months.

Unlike big IT players such as Accenture, most Indian IT firms have not publicly revealed AI revenue figures, inferring that IT firms are publicly silent about these figures.

GCCs Ensuring Supply for Demand Competition

Thrown into the mix are Global Capability Centers (GCCs). These are evolving at a fast pace; shifting from back-office functions to becoming strategic hubs for product innovation and AI. The Economic Survey mentions that India has more than 1,700 GCCs, which are projected to aid the GDP by $121 billion by 2030.

These centers are also competing for the market share aggressively through automation and AI innovations aimed at domain and intelligent governance.

Industry-Wide Uncertainties Are Shown In Hiring Pattern

The IT services sector still suffers from a lack of hiring growth. Although many firms reversed the headcount slump from FY24; the combined net hiring for TCS, Infosys and Wipro stood at a measly 13,500 in FY25.

According to the survey, even with environmental factors improving, strong growth in hiring is not likely.

Steps Moving Forward

Indian IT companies may need to implement GCC-inspired models, refine talent approaches, and prioritize the creation of AI-based capabilities. Industry leaders unanimously agree that continuing as is experienced growth is no longer an option.

In FY25, Indian IT companies mark a shift, needing to within this cycle. Whether the ‘slump’ is seasonal or more structural, will it be a wake-up call for the country’s IT behemoths to transform or be obsolete?