India's IT-BPM industry is projected to reach $290 billion in revenue in FY27, growing 11% from $261 billion in FY26, according to NASSCOM's annual industry outlook report. The acceleration from 8.4% growth in FY26 reflects the significant pick-up in large deal wins driven by AI transformation mandates from global enterprises, which are replacing legacy system modernisation as the dominant use case driving IT spending decisions.
Generative AI services are expected to account for $18-22 billion of incremental revenue in FY27, up from approximately $8 billion in FY26, as clients move from AI experimentation to production deployment at scale. NASSCOM's survey of 120 global CIOs found that AI-related budget allocation has more than doubled year-on-year and that Indian IT companies are winning the majority of large AI implementation contracts due to their cost competitiveness and engineering talent depth.
The talent landscape is also evolving rapidly, with Indian IT companies hiring 2.8 lakh fresh graduates and upskilling over 12 lakh existing employees in AI and cloud technologies in FY26. The industry's headcount grew 4.2% to 6.1 million employees, reversing the decline of the previous two years. NASSCOM President Rajesh Nambiar said India's IT sector is at an inflection point where AI could drive a decade of above-trend growth similar to what the internet triggered in the late 1990s.
