Indian IT sector expects growth in FY26 fueled by AI and digital transformation efforts, despite global uncertainties.
- Main event: Indian IT sector forecasts growth in FY26 spurred by AI.
- 10-12% hiring growth anticipated for key tech firms.
- Increased AI and R&D focus may affect global digital markets.
The Indian IT sector is set for a rebound in FY26, driven by investments in AI and digital transformation by major firms such as TCS and Infosys.
The sector’s projected growth signals optimism amid global uncertainties, focusing on AI and R&D, potentially impacting global digital and blockchain markets.
TCS and Infosys Lead AI-Driven Growth for FY26
The Indian IT industry’s optimism for FY26 follows muted Q4 results. Companies like TCS and Infosys are investing in AI and digital transformation to drive new growth. C Vijaykumar, CEO of HCL Technologies, noted a shift from linear growth models due to AI adoption and changing client needs. This change suggests a significant industry transformation.
“Over the past 30 years, the industry has grown in a linear fashion—both in revenue and workforce size—but this traditional model is now poised for disruption.” – C Vijaykumar, CEO, HCL Technologies. Source
Job Market to See 10-12% Growth in Indian IT
The anticipated 10–12% hiring increase marks a stark contrast to FY24’s job cuts, indicating a recuperating market. AI investments are expected to bolster resilience and competitiveness. Financial analysts predict a rebound with an estimated 500,000 to 750,000 new roles in FY25. This instills market confidence in AI and digital transformation investments.
AI and Digital Focus Drive Post-2008 Style Recovery
Following patterns seen in post-2008 and FY21, IT sectors respond to global shocks with cautious strategies. Recent BFSI sector recovery offers a template for broader IT industry optimism.
“Although there were signs of revival in FY25—particularly with BFSI recovering, leading to optimism across adjacent sectors like retail and manufacturing—the unexpected events have disrupted this momentum, as there is lack of clarity surrounding it.” – Gaurav Parab, Principal Research Analyst, NelsonHall. Source
According to analyst Gaurav Parab, while uncertain global events persist, strategic AI and digital investments could usher in enhanced IT sector resilience similar to earlier recoveries.
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