BL Nasscom Roundtable: Generative AI to drive next phase of growth for Indian IT 

India’s $245 billion Information Technology (IT) sector, grappling for growth in the current macro-environment, has a new significant growth vector with the advent of Generative AI. The technology sector at large in the region inclusive of GCCs and start-ups, have huge headroom to grow as the world turns to leverage the growing dominance of India’s capabilities, industry leaders said on at a businessline-Nasscom roundtable.

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Even as the IT industry grapples to maintain its growth momentum, the advent of Generative AI, gives a new growth opportunity. Jagdish Mitra, Head President - India and Head of Corporate Affairs, Tech Mahindra says the industry has always been transitioning from one technology to another, whether it was the year 2000, or subsequently changing to application products. Further, industry moved on to multiple cloud partnerships. “Each one of these technologies have had a transactional and transformational change in the way business uses technology, it’s a no brainer that the next business use technology is about Gen AI and therefore the ability for Indian industry to be able to address the opportunity that Gen AI throws at it,” Mitra noted.

All Indian IT players have made big investments in training and skilling their resources, and the sectors’ knowledge of the way businesses work is critical as new technologies are being applied, is its advantage. Mitra said, “There will be a significant upswing in the way technologies get applied to get automation productivity gains, and create new services, products for our clients. That’s the new area of growth for the industry.”

Jagdish Mitra, Head President - India and Head of Corporate Affairs, Tech Mahindra

Echoing the same, Sangeeta Gupta, Sr. Vice President, and Chief Strategy Officer at Nasscom explains that there is still significant opportunity within IT services in market areas like Europe, where companies still haven’t leveraged India to its full potential, leaving room for growth. Further, amid current macros, as companies look for cost efficiency and talent ast scale, Indian tech services are best suited to offer the same. “Despite the global slowdown, we continue to grow as a sector. I don’t think we should write about the death of this industry, it is there, is still growing and will continue to grow,” she said.

Considering the broader tech landscape, India’s growing clout as a preferred destination for setting up global capability centres (GCC), will also shape India’s “techade.” Sindhu Gangadharan, SVP & MD,SAP Labs India and Vice Chairperson, Nasscom, said, “India has emerged as the top choice for global companies to drive innovation, access the skilled talent, groom the next generation of leaders and also build world class products. With the blueprint for GCC 4.0 being redrawn, India is right at the epicentre of the shift. Global companies are increasingly looking to expand in India, resulting in India being the GCC capital of the world.”

Gupta notes that even as India has 1580-1600 GCCs, a lot of companies are yet to explore India. Of the global 2000 R&D spending companies, India still has less than 25 per cent, thus providing huge scope to grow.

India’s role in AI landscape

With AI being touted as a gamechanger in the next leg of growth for the tech sector, industry leaders remain sanguine about the role India will play and the scale of effect it will have. Gangadharan said, “India aspires to position itself as the global AI hub and has enormous potential for driving the AI revolution. Investments into India’s AI capabilities is expected to touch $881 million this year. Industries like Agritech and semiconductor are becoming huge backbones to the Indian AI market, which is expected to be worth $7.8 billion.”

Sangeeta Gupta, Sr. Vice President, and Chief Strategy Officer at Nasscom

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While the government closely works with the industry to have AI regulations, it is also important to collaborate with governments across the world to build institutional frameworks and have well defined guardrails. Governments need to have a pro-innovation approach, that maximizes the value of newer technologies, she further notes.

“AI will provide that additional fillip that India needs. Clearly for the size of India, given our diversity, AI can provide that binding force. It will enable language barriers to disappear, enable access to content and information, help education by enabling students to learn in remote areas. Given we have built our digital foundation, AI and intelligence coming on top of it will address many issues,” Gupta concludes.

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