Technology Sector Continues Steady Expansion
India’s technology industry is projected to reach $315 billion in revenue in FY26, growing 6.1 percent year-on-year from $297 billion in FY25, according to the Annual Strategic Review 2026 released by NASSCOM.
Despite global economic uncertainty and regulatory fragmentation, demand for technology services remained resilient. However, enterprises shifted spending priorities toward productivity gains, measurable return on investment, and outcome-driven transformation.
As a result, companies increasingly aligned technology investments with operational efficiency and strategic business outcomes.
Export and Domestic Markets Show Balanced Growth
India’s technology exports are expected to exceed $246 billion in FY26, reflecting 5.6 percent annual growth.
At the same time, domestic demand expanded 7.9 percent, driven by rising enterprise adoption of digital infrastructure, cloud systems, and AI solutions.
While traditional markets faced macroeconomic pressures, technology spending in Asia-Pacific and the Middle East grew faster than in mature markets. This geographic diversification allowed Indian firms to strengthen revenue streams and reduce dependence on a single region.
Artificial Intelligence Becomes a Revenue Driver
Artificial intelligence has moved beyond experimentation and is becoming a meaningful revenue source for technology companies.
NASSCOM estimates AI-related revenues at $10–12 billion in FY26, with 5–6 percent of industry revenue now linked directly to AI-led services.
Organizations are moving away from fragmented pilot programs and implementing domain-specific AI deployments aligned with business goals. This shift reflects a broader transition toward scalable AI systems that deliver measurable impact.
Sindhu Gangadharan noted that AI is reshaping productivity and the structure of work across industries.
She emphasized that companies are building “Human + AI” teams, where employees collaborate with intelligent systems to improve efficiency while creating new career pathways.
Hiring Continues Despite Automation Concerns
The technology sector added around 135,000 employees in FY26, increasing the total workforce to approximately 6 million professionals, a 2.3 percent increase from the previous year.
Although automation remains a key industry discussion, the sector continues to generate employment as organizations expand new technology capabilities.
More than 2 million professionals were upskilled in AI during the year, including 200,000 to 300,000 individuals trained in advanced AI technologies.
These initiatives reflect the industry’s transition from headcount-driven hiring toward capability-focused talent strategies.
ER&D and BPM Drive Industry Growth
Growth in the sector is increasingly powered by Engineering Research and Development (ER&D) and Business Process Management (BPM) services.
ER&D has become the fastest-growing segment, as technology providers move toward intellectual property-led innovation and lifecycle ownership of products and systems.
Meanwhile, BPM companies are combining data analytics and AI to move beyond traditional automation. Instead of simply automating repetitive tasks, these firms are enabling decision intelligence and process optimization.
Global Capability Centres Strengthen India’s Position
Global Capability Centres (GCCs) remain central to India’s technology ecosystem.
Nearly 70 percent of GCCs now have defined AI strategies, reflecting the growing integration of AI across enterprise operations.
These centres are evolving from scale-based service delivery hubs into strategic innovation units responsible for cybersecurity, data analytics, and cloud transformation.
Rajesh Nambiar described the past year as a turning point for the industry.
He noted that global demand increasingly favors productivity-focused technology solutions and large-scale AI deployments, strengthening India’s position as a trusted technology partner.
Global Buyers Increasing AI Budgets
Findings from the NASSCOM Global End User CXO Survey reinforce the industry outlook.
Approximately 86 percent of global technology buyers expect demand to remain stable or increase in 2026, while 56 percent anticipate higher demand compared to 2025.
Additionally, 90 percent of enterprises plan to increase AI allocations within digital budgets, signaling a clear shift from experimental AI spending toward structured, long-term investments.
This transition indicates that artificial intelligence is moving from optional experimentation to a core driver of enterprise transformation.
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