New Delhi: The Indian information technology (IT) sector is poised to surpass $400 billion by FY2030, driven by the rapid adoption of artificial intelligence (AI) that is reshaping how enterprises deliver and consume technology services (hugely supported by several government initiatives over the years), according to a new report by Bessemer Venture Partners (BVP).
The sector, which has grown at a compound annual growth rate (CAGR) of 8.1 per cent from FY22 to FY25 to reach $264 billion, is projected to expand at an even faster pace of 8.7 per cent annually over the next five years. The report highlights that while AI-led automation may temporarily exert downward pricing pressure, it will ultimately expand outsourcing opportunities as global enterprises embrace AI-enabled workflows.
“Growth has slowed in the short term as enterprise clients use AI as a lever to negotiate lower prices, citing productivity gains,” said Nithin Kaimal, Chief Operating Officer and Partner at BVP. “However, we view this as a temporary pause in a longer, decade-scale growth story. New market opportunities created by AI will more than offset any near-term price compression.”
Kaimal added that as AI capabilities mature, a larger share of complex tasks will be handled through a mix of automation and human expertise, fueling demand for high-value outsourcing. “While some contracts may shrink due to automation, the overall addressable market will expand as enterprises increasingly outsource higher-value, AI-enabled work,” he said.
The report underscores a structural transformation in India’s IT sector, with emerging technologies redefining client priorities and spending models. Analysts believe this shift positions India’s IT firms to capture a larger share of global technology spending as AI becomes central to enterprise strategy.
Notably, the surge in AI adoption and development in India has accelerated following the government’s launch of the IndiaAI Mission, aimed at building a comprehensive ecosystem around artificial intelligence. Similarly, in the technology sector, various initiatives, from Production-Linked Incentive (PLI) schemes to electronics manufacturing programs, have collectively contributed to creating a robust, end-to-end ecosystem..
