India’s $315 billion technology services industry is undergoing a transformative shift, with artificial intelligence moving from experimental to central, prompting changes in revenue, hiring, and service delivery models, according to Nasscom president Rajesh Nambiar.
India’s $315 billion technology services sector is moving through a period of change that could reshape how it earns revenue, hires people and measures value. In an interview with businessline, Nasscom president Rajesh Nambiar said artificial intelligence is no longer an experimental layer on top of enterprise technology, but is becoming central to how clients run operations. He argued that the industry’s old assumption that revenue would rise in step with headcount has already been broken, even if deal pipelines and order books remain healthy.
That shift is feeding a broader move away from the traditional full-time-equivalent and time-and-materials model towards contracts based on outcomes. Nambiar said the change is no longer optional because AI is improving productivity for clients and forcing service providers to rethink how they price and deliver work. Recent reporting by the New Indian Express and Business Standard has echoed that view, with Nambiar describing a more selective hiring environment and saying AI budgets are moving from testing into scaled deployment. Business Standard also reported in June that Nasscom sees India’s AI services revenue at $10 billion to $12 billion, with nearly a quarter of companies already taking AI projects into production.
Even so, Nambiar rejected the idea that AI will simply wipe out the need for IT services. Speaking to Business Standard and The Economic Times earlier this year, he said enterprise technology environments are too complex, especially when legacy systems, regulation and data issues are involved. He argued that AI may automate many tasks inside a role, but it does not remove the need for firms that can modernise systems, connect platforms and manage change across large organisations. In that sense, he said, the industry is shifting from system integration towards AI orchestration.
The talent impact is likely to be uneven. Nambiar told businessline that greenfield work, where teams build new applications from scratch, is already seeing substantial automation, while brownfield modernisation remains labour-intensive. He said Nasscom is working with the government on an AI curriculum to update college education so graduates are better prepared for tools, agents and orchestration work. That fits with comments he made in March, reported by the New Indian Express, when he said the industry is moving towards selective hiring and placing more emphasis on problem-solving and AI skills.
Nambiar also argued that global capability centres and traditional IT services are more likely to coexist than to displace one another. He said both models offer different strengths and that many service providers have already built dedicated GCC practices. Beyond business model change, he pointed to policy consistency, smoother coordination between central and state authorities and a narrower gap between government intent and on-the-ground execution as key priorities. He also warned that India’s heavy dependence on the US market leaves the industry exposed to trade and mobility risks, even if the immediate revenue hit has been limited so far.
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