Indian tech needs war-time CEOs, not peace-time managers

Amid AI-led disruption and the consequent wealth erosion in the stock market, some good news has finally emerged for the Indian IT industry. Industry body Nasscom released its Annual Strategic Review 2026 on Tuesday, projecting that India’s tech sector is on track to grow 6.1 per cent in FY26 to reach $315 billion.

The service mix indicates that IT services revenue will reach $149 billion, business process management (BPM) $59 billion, engineering, research and development (ER&D) $63 billion, and software products $23 billion by the end of the financial year. IT exports are projected to grow 5.6 per cent year-on-year to $246 billion in FY26. The report also pegged AI services revenue at $10–12 billion for FY26. For FY27, Nasscom expects a similar growth rate, although it cautioned that the AI transition could cause some near-term slowdown.

An important commentary in the review came from Nasscom President Rajesh Nambiar, who highlighted a widening divergence between revenue growth and net hiring numbers.

The Nasscom report can be viewed in two ways. First, the projection of a similar growth rate for FY27 can be seen as a vote of confidence in the Indian tech industry’s ability to manage AI-led disruption. A cursory look at the share price movement of Indian IT stocks may suggest that markets are pricing in a worst-case scenario. Nasscom’s confidence, however, indicates that deeper work is already underway. Historically, Nasscom’s projections have remained close to reality, and the Indian tech industry has successfully navigated multiple technology cycles in the past. Viewed in that context, this confidence is not misplaced.

Second, the Nasscom President’s observation on the growing divergence between headcount addition and revenue growth is a significant indicator of what lies ahead. Hiring numbers had begun moderating even before the COVID-19 pandemic, with companies requiring fewer employees to generate a given level of revenue. While the post-COVID years were an exception, mass hiring of IT professionals is unlikely to be repeated as AI adoption accelerates. That said, with global capability centre (GCC) hiring remaining robust, overall headcount additions are unlikely to fall off a cliff, as some analysts fear.

On AI, Nasscom believes enterprises are increasingly integrating AI solutions to improve efficiency. This shift will fundamentally redesign job roles in the technology industry, pushing them towards deeper specialisation. As Nasscom continues to deliberate on AI’s evolving role in India’s tech landscape, it remains to be seen whether the industry body engages in plain speaking with tech leaders and nudges them to do more to ensure long-term survival.

Overall, the Nasscom annual summit this year should resemble a war-time cabinet meeting rather than a cheer party for the domestic technology ecosystem. At the same time, Indian IT companies, tech startups and SaaS firms need more war-time CEOs than peace-time managers.