India’s technology industry is projected to grow 6.1 percent to $315.4 billion in revenue in fiscal year 2026, crossing the $300 billion milestone for the first time, according to the latest Strategic Review by Nasscom.
The industry body also revised its FY25 revenue estimate upward to $297 billion from $283 billion earlier, reflecting stronger-than-expected performance despite global macroeconomic headwinds.
AI-Led Services and GCC Momentum Power Growth
The projected growth for FY26 is being driven by rising demand for artificial intelligence-led services and expanding business from Global Capability Centres (GCCs). While the IT and software services industry continues to face tepid global demand and disruption risks from advanced AI tools, companies are increasingly shifting toward value-led and innovation-driven growth.
India’s tech exports are estimated to exceed $246 billion in FY26, marking a 5.6 percent increase over FY25. Domestic revenue is projected to reach $69 billion.
The Nasscom review indicates that the sector is transitioning from scale-based expansion to a model centered on higher-value offerings, digital transformation, and AI industrialization.
Segment-Wise Growth in FY26
Among export segments:
Engineering Research and Development (ER&D) is expected to be the fastest-growing segment at 7.7 percent.
Business Process Management (BPM) is projected to grow 7 percent.
IT Services are estimated to expand 4.1 percent.
Software products are forecast to grow 4 percent.
This diversified growth highlights resilience across service lines even as discretionary spending has been cautious in key global markets.
Employment to Near 6 Million in FY26
The technology sector is expected to add 135,000 jobs on a net basis in FY26, taking total direct employment to nearly 6 million. The workforce rose to 5.8 million in FY25 from 5.67 million a year earlier.
However, hiring patterns are evolving. Rajesh Nambiar, President of Nasscom, noted that campus recruitment has declined significantly compared with previous years. Companies are shifting from volume-based hiring to a skill-mix strategy, prioritizing AI fluency, problem-solving capabilities, and domain expertise.
Emerging roles such as AI reliability engineers, human-AI managers, and process architects are expected to grow faster than the overall digital workforce.
Outlook for FY27: AI Spending to Mature
For FY27, tech spending growth is projected to remain range-bound between 5 percent and 7 percent year-on-year. AI investments are expected to move from experimentation to industrial-scale deployment.
While AI budgets are set to rise gradually, growth remains constrained by data readiness, legacy systems, and process gaps within enterprises. Strong contract bookings and a revival in discretionary spending have led major Indian IT firms to signal improved demand visibility for FY27.
A recent selloff in Indian IT stocks had wiped out about $44 billion in market capitalization earlier this month, reflecting investor concerns around AI disruption and global demand softness. However, the medium-term outlook appears more stable.
Long-Term Projections: eCommerce, ER&D and Frontier Tech
Looking ahead to 2030, India is expected to become the world’s second-largest eCommerce market, serving an estimated 500 million users. Global engineering R&D spending is projected to reach approximately $2.5 trillion by 2030, positioning Indian providers as strategic partners in the global innovation ecosystem.
Future growth drivers are expected to include investments in semiconductors, space technology, quantum communications, and robotics. As AI becomes embedded across industries, India’s technology sector is poised to evolve from a services powerhouse to a global innovation hub.
RAJANI BABURAJAN
