AI disrupts India IT outsourcing as roles evolve
MUMBAI, INDIA — India’s IT outsourcing industry, long the backbone of the country’s US$300 billion technology sector, is facing fresh uncertainty as artificial intelligence (AI) tools rapidly automate repetitive work.
According to a report from Financial Times, while traditional roles may shrink, the shift could create higher-value opportunities for the nation’s tech talent.
How AI is disrupting India’s traditional IT jobs
Shares in Indian IT firms have tumbled since the launch of Anthropic’s professional AI tools, prompting concerns about the sector’s future. The industry employs over six million people, making it the largest white-collar sector in India, and a crucial pillar of the economy.
“There’s a huge disconnect. I think that is coming from a sense of desperation from the industry leaders, because they don’t want to send out a message that’s gloomy,” said Financial Times Mumbai correspondent Krishn Kaushik.
He added that while IT leaders insist AI presents an opportunity, independent experts and market observers sense that “there is something truly amiss.” This is already being felt on the ground, with experts noting that at least 20,000 jobs have been lost in the past six months.
Kaushik explained that Indian IT firms are trying to leverage their deep insight into client operations.
“We can give you the diagnostic answer for how you need to leverage AI, and let us build those AI tools for you,” Kaushik said, describing their pitch to clients.
However, the looming question is whether global clients will continue outsourcing AI-enabled services or bring those capabilities in-house.
Even as major players like Tata Consultancy Services and Infosys form partnerships with AI companies.
“The repetitive work that was once required — that was the bread and butter for many of these companies…those are the jobs that are really threatened,” Kaushik warned.
Global capability centers drive high-skilled IT growth
While routine jobs face disruption, India’s tech talent is finding new avenues through global capability centers (GCCs).
These hubs, operated by multinationals including Google, Boeing, Airbus, and JP Morgan, have evolved from back-office operations into research and development centers.
“You don’t need to be at the frontier of tech to be a tech employer in India…so that’s where the reskilled jobs, many of them, are going,” Kaushik said.
GCCs are attracting highly skilled workers returning from U.S. offices or transitioning from traditional IT roles, offering more challenging responsibilities in AI and advanced tech.
While India’s traditional IT outsourcing model faces pressure, the shift toward higher-value roles may strengthen the country’s global tech competitiveness.
As AI automates routine processes, companies and workers adapting to more complex, innovative tasks could secure India’s position as a hub for specialized IT services in the international market.
