Indian IT must expand globally amid AI disruption — industry veteran

BENGALURU, India — Indian IT companies are facing mounting pressure to diversify globally as artificial intelligence (AI) reshapes the technology landscape, according to Pareekh Jain, an industry veteran and the founder of Pareekh Consulting, in an interview with Bizz Buzz.

The rapid rise of AI tools creates a threat to established revenue channels that forces companies to develop new methods for both business expansion and market competition.

AI disruption triggers tech market sell-off

Global technology indices, including those in the United States and India, have seen sharp sell-offs amid investor concerns over AI’s impact. The Nifty IT Index in India has lost more than 15% in the past month, with several top IT firms shedding over 10% of their market capitalization. 

“The market is nervous due to uncertainty in growth prospects,” Pareekh Jain said.

Jain emphasized that while AI may automate coding tasks, it will not eliminate the need for IT services entirely. 

“IT services as an industry doesn’t face any existential pressure… Managing the whole technology stack of enterprises requires the involvement of IT services companies,” Jain told Bizz Buzz. 

However, he noted that the margin profile of IT firms is expected to change, fueling investor anxiety.

Global expansion strategies for Indian IT firms

Indian IT firms must adopt a diversification strategy to navigate the AI wave. The company needs to implement new pricing systems that will require it to expand its operational areas and develop its workforce through mergers and acquisitions. 

“Indian IT companies have to adopt the diversification strategy… They have to change the employee pyramid because with AI, the employee pyramid is undergoing changes,” Jain explained.

Despite AI potentially disrupting 20–25% of IT work, especially coding, the broader service layer, including maintenance, integration, and contextualization, remains essential. 

“Indian IT industry can still grow from US$250 billion to US$800 billion,” Jain argued.

As companies navigate these changes, Indian IT companies have a chance to expand their global outsourcing market share through their entry into new markets located in Japan, South Korea, Latin America, and Africa. 

Indian IT companies can sustain their market position through strategic diversification while maintaining operational costs to compete against the disruptive impact of AI on their fundamental software service operations.

The shift highlights a broader trend in the outsourcing industry as AI will transform human-led IT services instead of completely replacing them. Companies that adapt through innovation, geographic expansion and flexible business models will succeed while companies that resist change will experience margin declines.