The future of India’s technology services sector will be significantly shaped by artificial intelligence (AI), according to a new report released on Tuesday. This is because AI, especially the emergence of agentic AI, will open up $300–500 billion in new opportunities and usher in a new era in which intelligent AI agents and humans collaborate as hybrid teams.

According to research gathered by Nasscom in partnership with McKinsey & Company, the tech services industry saw significant changes between 2020 and 2025, ranging from the disruptive rise of AI and shifting geopolitics to pandemic-driven digital acceleration.

AI is becoming a crucial differentiator as businesses reassess their technology investment, and it is anticipated that they will allocate a greater percentage of their budgets to AI-driven innovation and productivity.

Revenue growth would be slower in the near future, with a better recovery anticipated between 2027 and 2030, even if India’s tech services sector is predicted to maintain its growth advantage.

Over the next five years, the demand for data and AI is expected to increase by 12–15%, notwithstanding the potential shrinkage of legacy service lines.

The paper, “Future of Technology Services: Leading with AI,” also emphasizes how India’s global capability centers (GCCs) would become increasingly significant and develop into international innovation hubs for businesses.

The real future of technology services, according to Nasscom President Rajesh Nambiar, would be determined by the fusion of automation powered by AI and human expertise.

“Hybrid teams will change price structures, productivity, and delivery patterns over the next three to five years. India is in a unique position to spearhead this change, but it will necessitate a significant effort to reskill and reimagine service models,” he stated.

Agentic AI presents a “once-in-a-generation” growth opportunity, but it will also necessitate that the industry rethink its operating model, make R&D investments, and create talent pools for new capabilities, according to Noshir Kaka, Senior Partner at McKinsey & Company.

The study comes to the conclusion that in order for India to solidify its standing as the world’s center for technology services in the AI era, the sector must quickly transition to AI-driven innovation, new delivery methods, and audacious alliances while simultaneously defending its core offerings.