India’s technology sector revenue is expected to climb to USD 315 billion in fiscal 2026, even as artificial intelligence contributes a relatively small 3-4 per cent of the total, indicating that growth continues to be driven by core IT services, engineering R&D and global capability centres rather than AI alone, a new report by industry body Nasscom revealed.
The sector is forecast to grow 6.1 per cent year-on-year (YoY) from an estimated USD 297 billion in FY25, in a period marked by global economic uncertainty and tighter client spending. Technology demand remained resilient, but shifted decisively toward efficiency, measurable return on investment and outcome-led transformation.
AI-linked revenue is estimated at USD 10-12 billion in FY26, pointing to increased adoption at scale as enterprises move beyond pilot projects. However, the bulk of industry revenue continues to come from traditional segments.
“The past year has been a reset for the global environment, but technology demand has remained resilient; shifting decisively toward productivity, measurable ROI and scaled AI deployments. India’s AI advantage is widening, making organisations more agile and outcome led,” said Rajesh Nambiar, President, Nasscom.
IT And Export Revenue
IT services are projected to generate USD 149 billion, while engineering research and development (ER&D) is expected to contribute USD 63 billion. Business process management (BPM) revenue is seen at USD 59 billion, with software products at USD 23 billion and hardware at USD 21 billion, Nasscom data showed.
Export revenue is forecast at USD 246 billion, with Asia-Pacific and the Middle East emerging as the fastest-growing markets. The domestic market continued to expand steadily, while the industry’s vertical mix evolved with incremental gains in sectors such as healthcare and travel and transportation, largely driven by global capability centres.
Tech Sector Remains Net Hirer
Despite automation and productivity gains, the industry remained a net hirer, recording net workforce growth of about 2.3 per cent. More than two million professionals were upskilled in AI, including 2,00,000 to 3,00,000 in advanced AI skills, as companies redesigned roles around outcomes and higher AI fluency.
“AI is accelerating productivity and changing the nature of work, but it is also expanding the opportunity frontier,” Nasscom Chairperson Sindhu Gangadharan said, adding that the focus remains on building “Human + AI” teams and converting efficiency gains into growth.
However, the availability of job-ready talent for specialised roles remains uneven despite India’s large graduate base, said Dr. Nipun Sharma, CEO at TeamLease Degree Apprenticeship.
“India has the scale, producing nearly 1.5 million engineering graduates annually, but readiness for specialised roles remains uneven. Positions in areas such as AI operations, cloud infrastructure, cybersecurity and data engineering require applied exposure that many graduates do not receive through traditional coursework. The opportunity to fill one lakh specialised tech roles exists, but it depends on strengthening capability pipelines that emphasise hands-on learning, industry exposure, and faster skill alignment with emerging technologies,” Sharma said.
Nasscom said GCCs and ER&D continued to be technology sector’s main growth engines with significant headroom ahead, while niche areas such as cybersecurity, data analytics, cloud and GCC-as-a-service are reaching critical mass and becoming embedded across multiple segments. |
