India Tech Sector to Hit $315B in FY26 as AI and GCCs Drive New Growth Cycle

India’s technology sector is entering a transformative phase, with the National Association of Software and Service Companies (Nasscom) projecting total revenues to reach $315 billion by the end of fiscal year 2026. This milestone represents a 6.1% growth rate, a figure that underscores the industry's resilience in a period of global economic recalibration. The primary catalysts for this expansion are no longer confined to traditional software maintenance and business process management; instead, the growth is being propelled by the rapid integration of Artificial Intelligence (AI) and the strategic expansion of Global Capability Centers (GCCs).

The emergence of AI as a standalone revenue vertical is perhaps the most significant takeaway from the Nasscom data. AI-related services are expected to generate between $10 billion and $12 billion in FY26. This shift indicates that Indian IT giants and startups alike have successfully pivoted from exploratory pilot projects to large-scale, enterprise-grade AI implementations. As global corporations look to integrate generative AI into their core operations, they are increasingly turning to Indian service providers for the necessary engineering talent and domain expertise. This transition is critical for maintaining India's competitive edge against emerging tech hubs in Eastern Europe and Southeast Asia.

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AI-related services are expected to generate between $10 billion and $12 billion in FY26.

Parallel to the AI boom is the continued evolution of Global Capability Centers. Once viewed primarily as cost-saving back-offices, GCCs in India have matured into sophisticated innovation hubs that lead global digital transformation initiatives. These centers now account for a substantial portion of the industry's growth, attracting high-value investments from Fortune 500 companies. The presence of over 1,600 GCCs in India provides a stable foundation for the tech ecosystem, fostering a virtuous cycle of talent development and technological advancement. This "GCC 4.0" era is characterized by centers taking full ownership of global products and platforms, further cementing India’s role as the "world's technology office."

However, this growth trajectory is not without its challenges. The 6.1% growth rate, while healthy, reflects a more mature market compared to the double-digit surges seen in the previous decade. Industry leaders must navigate a complex landscape of rising talent costs, particularly in specialized fields like machine learning and data science. There is also a growing imperative for the workforce to upskill; Nasscom has frequently highlighted the "skills gap" as a potential bottleneck. To reach the $315 billion target, the industry will need to ensure that its vast labor pool—currently exceeding 5 million professionals—is equipped to handle the complexities of AI-driven workflows.

From a market perspective, the focus is shifting toward "value-per-employee" rather than simple headcount growth. As AI automates routine tasks, the revenue model for Indian tech is evolving from time-and-material contracts to outcome-based pricing. This shift could lead to improved margins for companies that successfully productize their AI offerings. Investors are closely watching how major players like TCS and Infosys balance the decline in legacy revenue with the high-growth potential of digital and AI services. Looking ahead, the synergy between government initiatives and private sector innovation will be paramount. Programs like the IndiaAI Mission are expected to provide the necessary infrastructure, such as compute capacity and datasets, to support the domestic AI ecosystem. If the industry maintains its current momentum, the $315 billion mark in FY26 will serve as a stepping stone toward the ambitious goal of a $500 billion tech economy by 2030.