Sandip Agarwal predicts that artificial intelligence has already caused the majority of its disruption to the Indian IT services sector [1].
This shift is critical because the transition to AI-led technology has sharply reduced demand for traditional IT services [1]. As the industry moves past this volatility, the ability to pivot toward AI integration will determine the long-term viability of India's global outsourcing dominance.
Agarwal, a fund manager at Sowilo Investment Managers LLP, said that 70% to 80% of the AI disruption is already behind the industry [1]. He expects the remaining impact to materialize by the September quarter [1].
According to Agarwal, the Indian IT sector is nearing a major turnaround after almost two years of sluggish growth [2]. He said that the current phase of disruption is creating a multi-year growth opportunity for firms that can successfully adapt to the new technological landscape [1].
Other industry leaders share a similar outlook on the potential for expansion. N. Chandrasekaran said that AI is the largest growth opportunity for Indian IT [3].
However, the nature of this transition remains a point of contention among analysts. Some reports suggest that AI has simply reduced demand for traditional services [1], while others argue that AI agents threaten the very foundation of the Indian IT services industry [3]. Despite these differing views on the depth of the disruption, the consensus points toward a fundamental transformation of the sector's operational model.
“About 70-80% of the AI disruption is already behind the industry”
The Indian IT sector is transitioning from a period of instability caused by the automation of legacy services to a new growth phase centered on AI implementation. While the initial shock to traditional service demand has been severe, the projected turnaround suggests that the industry is successfully absorbing the disruption and repositioning itself to provide high-value AI integration services.
