IT biz to grow 6.1% in FY26 despite AI headwinds

MUMBAI: Navigating twin disruptions - intensifying geopolitical uncertainty and the rapid rise of AI-native competitors - India's technology industry is leaning on its strengths of scale, engineering depth and delivery resilience. Despite AI-led disruption that rattled stock prices, India's tech sector is on track to grow 6.1% to $315 billion in FY26, according to Nasscom.The growth reflects steady demand across segments even as enterprises recalibrate spending priorities. The 2026 revenue mix underscores the industry's diversified base: IT services at $149 billion, BPM at $59 billion, ER&D (engineering R&D) at $63 billion, software products at $23 billion and hardware at $21 billion. Indian IT exports are projected to rise 5.6% year on year to $246 billion in FY26, up from $233 billion in FY25.Nasscom president Rajesh Nambiar described FY25 and FY26 as a structural transition phase for the industry. While 2025 was marked by global economic caution and geopolitical shifts, he said technology spending was not cut - it was redirected. Enterprises prioritised resilience, productivity and AI-led transformation over discretionary expansion. AI, he said, moved from experimentation to execution. "Industry AI revenue is estimated at $10-$12 billion in FY26, contributing roughly 3-4% of overall industry revenue, and up to 5-6% for some companies. AI is embedded in most enterprise proposals today," he said at the Nasscom Technology Leadership Forum (NTLF) 2026 in Mumbai. Around 70% of the top 25 providers acquired AI-native capabilities, 85% now have agent platforms, and 35%-40% offer verticalised AI solutions.Even as AI reshapes delivery models, the industry remains a net hirer. Total headcount rose by 1.35 lakh to 5.9 million in 2026, marginally higher than last year’s addition of 1.33 lakh. Though headcount growth stagnated, Indian IT is quick to reinvent for the AI-native with demand shifting towards domain-specialised and industry-focused roles. Much of the incremental hiring is being driven by global capability centres (GCCs) for the third consecutive year, which continue to expand their mandates in India.Nambiar pointed to a widening divergence between revenue and employment growth. “The industry remains a net hirer, though employment growth is moderating as non-linearity increases. Reskilling and capability transformation are central priorities,” he said.Nasscom chairperson Sindhu Gangadharan said AI’s deeper integration across business functions will fundamentally redesign roles. “We will see roles shaped around outcomes, deeper specialisation and significantly higher AI fluency. The focus is on building ‘Human + AI’ teams, investing in continuous skilling, and converting efficiency gains into growth,” she said. Fractal Analytics founder and CEO Srikanth Velamakanni captured the dual nature of the shift. AI is simultaneously expanding and compressing work within companies, he said, with the net effect reflected in moderate hiring numbers. Traditional tasks are shrinking, even as new areas of work open up. Importantly, AI is now integral to business development. “There is no chance of winning business without AI embedded in how you solve problems. AI is now a fundamental part of every proposal,” he said. Looking ahead, Nasscom sees FY26 and FY27 as investment years, with companies focusing on AI-led scaling, operational efficiency and innovation to drive the next phase of growth.