The Inflection Point for Indian Tech  |  Rajesh Nambiar

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India’s digital economy is at an inflection point. With artificial intelligence reshaping industries and talent becoming a defining currency, the stakes have never been higher—or more exciting. From software to semiconductors, from digital public goods to deep tech, India is laying the groundwork for a powerful shift in global tech dynamics.

To make sense of the road ahead, we turned to one of the country’s most influential voices in tech policy and leadership. Rajesh Nambiar, President of Nasscom, brings deep industry insight and a global perspective shaped by decades in the technology trenches.

In this special MIT Sloan Management Review India launch interview, we begin with a conversation that explores India’s AI roadmap, talent transformation, the role of strategic clarity in a fragmented global landscape, and what business leaders must prepare for in this new era of intelligence-led growth.

The technology industry continues to navigate a complex global environment marked by inflationary pressures, elevated interest rates, and trade uncertainties. These macroeconomic factors have understandably led to cautious client behavior including delaying decisions and stretching project timelines. 

However, the industry has always shown remarkable resilience in the face of global macroeconomic uncertainties. Enterprises remain committed to digital transformation. This is further supported by strong domestic market expansion, the continued growth of Global Capability Centers, rising investments in Engineering R&D, and a dynamic DeepTech startup ecosystem.

While the short-term outlook remains cautious, the long-term momentum toward tech-driven innovation and reinvention continues to build.

 

How will US tariffs affect Indian IT? Is there cause for serious worry? 

While it’s still early to assess the full impact of the US tariff, growing uncertainty around trade and regulatory frameworks is prompting global technology companies to balance near-term caution with long-term resilience. Consumer demand is expected to soften in key markets, which might translate into extended decision cycles and a sharper enterprise focus on cost and ROI, particularly for large, discretionary IT projects. Once greater policy clarity emerges, many of these paused decisions are expected to resume, especially as enterprises reorient their strategies to optimize efficiency and innovation.

However, India’s technology ecosystem, particularly its thriving GCC, continues to show resilient momentum and the outlook for India’s GCCs particularly in research and development, appears more stable. GCCs operate upstream in the global value chain, often in areas like AI, digital platforms, engineering R&D, and cloud infrastructure—functions that are largely insulated from tariff-linked disruptions. These centres are less about exporting goods and more about exporting intelligence, IP, and innovation. The consistent momentum in GCC expansion through 2024 and early 2025 demonstrates that global enterprises, particularly US-based companies, see India as a critical hub for talent, innovation, and operational efficiency. 

Every business unit and function now, has some representation here, making India the nerve centres of global tech advancement. From Apple ramping up iPhone exports from India to global majors like Ford, Amgen, and ANZ expanding their footprint, the momentum is clear. New entrants such as Goodyear, Sonoco, Cyara, and Dark Matter have also announced the launch of their GCCs, signaling India’s growing role as a strategic global hub.

 

How can Indian IT move beyond survival to achieve sustained growth and global leadership?

The technology industry in India has long been a frontrunner in shaping the future of digital transformation—whether by building one of the world’s leading SaaS ecosystems or by setting global benchmarks in population-scale innovation through platforms like UPI and Aadhaar. Nearly a quarter of global engineering roles are now based in India, with industries like aerospace, defense, and semiconductors focusing on next-generation technologies. Additionally, semiconductor firms and tech multinationals are increasingly establishing product teams in India, fostering innovation. 

The industry is also making a greater impact on the global stage on patents with the nation’s patent-to-GDP ratio increasing 2.6 times in the past 15 years. India saw over 90,000 patents filed in FY24—marking its seventh consecutive year of growth. This rise, led primarily by resident filers, highlights the country’s expanding domestic innovation capabilities and the growing support from its innovation ecosystem. 

Another area is GCC which continues to be the key growth sector for the tech Industry in India, representing 1/3rd of the tech industry export. With over 1,760 GCCs,. these centers are no longer back-end hubs but are co-creating core products, designing next-gen platforms, and leading digital transformation from the front.

The next leap forward lies in sustained, strategic reinvention. Which means doubling down on building deep capabilities in AI and emerging tech, stronger domain specialization across verticals, and a shift from service-centric to solution-led, IP-driven models. The industry is already making this transition with integrated AI platforms, digital engineering, and cloud-native capabilities becoming mainstream.

 

What should the Indian tech sector do to overtake China and the US to become a global leader in artificial intelligence?

The argument is not whether India can catch up, but whether we can move fast enough and define a DeepTech identity on our own terms — much like how we built India’s unique SaaS success story, globally. India’s strength has historically been ecosystem-driven. The success of UPI stands as a powerful example of clear intent, strong government backing, and collaborative innovation. It not only transformed digital payments but also laid the foundation for India’s thriving fintech ecosystem, which today stands as a global benchmark for scale, inclusion, and innovation.

DeepTech, especially in AI, with its emphasis on cutting-edge innovation and technological leadership, is pivotal to driving India’s economic growth, creating high-value jobs, and strengthening the country’s position as a global technology powerhouse.  India has already paved its way in building a robust AI ecosystem with the India AI Mission. However, unlocking its full potential requires urgent action on key challenges such as access to patient capital, streamlining regulatory bottlenecks, especially in areas like biotech, and aerospace where innovation can’t wait for policy to catch up. Equally critical is infrastructure and R&D access — from affordable compute and shared labs to easier patent filing and open data. Finally, India must strengthen its research and commercialization pipeline by fostering cross-disciplinary talent and supporting product innovation at scale.

 

How significant is the threat posed by global capability centers to Indian IT services firms? 

The relationship between GCCs and Service Providers has matured, fostering a synergistic ecosystem to support and enhance each others’ growth. GCCs are leveraging Service Providers to accelerate their growth journeys, whether it is optimizing their operational efficiency and focus resources on core competencies, capability augmentation, risk mitigation and go-to-market strategies. At the same time, service providers are also setting up their own GCCs to build niche capabilities. The value being created across the ecosystem is fueled by efficiencies of multi-function centers, newer product and business lines being created, and India being leveraged as the sandbox of not just technology and innovation, but for global roles as well.

 

As AI adoption accelerates, what regulatory and security challenges do companies face, and how are these evolving?

Effective and responsible implementation is critical as organizations navigate the complexities of large-scale AI adoption from data security and regulatory compliance to ethical concerns.

To move from being AI-ready to truly AI-first, Indian enterprises — both large and small — must take focused, strategic steps. Large enterprises should invest in data standardization, forge strategic partnerships to accelerate PoC-to-production transitions, and strike a balance between efficiency-driven and innovation-led AI use, all while managing risks and embedding sustainability into their AI agenda. SMBs, on the other hand, should start with contextual, high-impact use cases, collaborate with tech SMEs to kick-start adoption, build leadership buy-in for agile execution, understand data regulations, and tap into peer networks to navigate common challenges.

 

How should Indian IT leaders rethink innovation models to thrive in a fast-changing tech landscape?

Innovation happens at various levels and as the tech industry we have always been considered as an innovator. The industry today contributes around 7% share relative the Indian GDP. Today, we stand as one of the world’s largest tech sectors, boasting an annual revenue of $280 billion plus and export revenue reaching more than $224 billion. We have a tremendously resilient tech sector that is powering the digital transformation of 90% of Fortune 500 companies.

Global companies are co-developing, co-designing, and co-producing in India for the world. India’s talent and technology are synonymous. Our brightest minds are powering the innovative tech start-up ecosystem in the country and the world. We are the first country to achieve population scale, deployment of technology.

 

What are the most critical skills gaps in Indian IT today, and how can companies and academia bridge them?

India has a huge opportunity to be a global leader in AI, and creating AI fluency at scale is a critical step in that journey. The Indian AI talent pool is expected to grow from 600,000–650,000 to more than 1,250,000 over 2022-27. However, the AI market is expected to grow at a rate of 25–35%, potentially signaling a demand-supply gap in the talent pool. Most Indian IT companies have already started training their workforce on AI and related technologies. For instance, AI and GenAI training have already impacted over 1 million professionals across the workforce pyramid. Notably, leading publicly listed companies have trained 73,000 employees in Advanced AI Skilling, emphasizing AI-native cloud and embedded AI certifications.

As technology becomes mainstream, niche skills like AI/ML, Cybersecurity will become the cornerstone of success. Nasscom has consistently emphasized the importance of fostering high-tech skills to meet global benchmarks and maintain India’s leadership in the tech sector. A collaborative approach involving industry, academia and the government is essential to ensure a successful strategy and execution for niche tech skill development and talent availability in India. This includes, working with academia to integrate foundational tech and AI coursework into degree and diploma programs, provide advanced training through hackathons, internships, IP creation programs and AI training academies. At the same time, the industry should lead national AI skilling initiatives, collaborating with peers and academia, implementing mass-scale programs and workshops to enhance AI awareness and user proficiency. 

 

As seen in their recent earnings statements, many deals involve AI. Innovation helps clients stay ahead in a cloud-first, AI-first models–what other factors are key to driving client success?

AI now features in nearly every client conversation, as reflected in recent earnings reports. The Indian tech industry saw a sharp uptick in GenAI momentum in H2 FY25, led by partnerships, product launches, and skilling. Over 60% of GenAI initiatives were partnership-driven, with nearly two-thirds focused on co-creation—bringing together hyperscalers, startups, and enterprises to deliver tailored solutions.

The go-to-market approach is evolving from siloed R&D to immersive experience centers where clients can test and deploy real-world use cases. Agentic AI is also shifting focus from consumer tools to enterprise applications, aligning well with India’s strengths in data, cloud, and platform integration.

Firms are innovating across the stack—embedding AI agents into ERP, CX, and developer platforms, while also accelerating workflow automation. Collaboration, contextualization, and speed to production will be key to sustaining client success in an AI-first era.

 

View a video of the interview here.

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