Indian IT industry gains momentum from GCC expansion: Everest CEO
HYDERABAD, INDIA — The Indian IT industry is set to benefit significantly from the rapid expansion of global capability centers (GCCs), according to Peter Bendor-Samuel, Founder and CEO of Everest Group.
In an interview with Bizz Buzz, Bendor-Samuel highlighted that the insourcing trend among global enterprises is creating a “bright spot” for India. The Build, Operate, and Transfer (BOT) model is at the forefront of this growth, with foreign firms increasingly setting up technology captives in India to manage critical IT operations.
“The insourcing GCC market is on fire,” Bendor-Samuel stated, adding that a new wave of technology transformation within this space is emerging. This trend underscores India’s pivotal role in the global IT landscape, with the momentum expected to continue through 2025.
Modest IT recovery expected amid competitive pressures
After eight consecutive quarters of deceleration, the global IT services sector is projected to experience a modest recovery in 2025. Key industries like banking, financial services, and insurance (BFSI), along with technology, are expected to lead this rebound.
However, Bendor-Samuel warned that the recovery will be uneven, with pricing pressures persisting due to intense competition.
Digital modernization initiatives are also anticipated to see a gradual uptick. Despite growing interest in artificial intelligence (AI), Bendor-Samuel believes AI will not yet become a significant revenue driver for IT companies.
“We have yet to see the large, compelling use cases for the much-anticipated AI boom,” he noted.
H-1B visa policies unlikely to derail outsourcing
Concerns over the potential tightening of H-1B visa norms under Donald Trump’s administration may not significantly impact Indian IT firms, according to Bendor-Samuel. He explained that the U.S. lacks sufficient domestic talent to execute large-scale IT projects, making outsourcing indispensable. While stricter regulations could marginally increase costs, they are unlikely to disrupt the industry’s growth trajectory.
“The most likely scenario is some rhetoric and minor issues such as visa restrictions, which may push costs up at the margin but do not derail the industry,” he explained.
Challenges persist for large deals and discretionary spending
The slowdown in mega deals observed in late 2024 is expected to persist into early 2025. While discretionary spending may see gradual improvement later in the year, it will likely remain subdued for at least two quarters.
However, Europe could emerge as a bright spot for large deals as firms explore cost optimization through labor arbitrage strategies.
