IT companies’ AI revenues will reach over $10-12 billion in FY26: Nasscom annual report

(from left) Rajesh Nambiar, president of Nasscom, Sindhu Gangadharan, chairman of Nasscom, and Srikanth Velamakanni, CEO of Fractal Analytics, at the Nasscom Technology and Leadership Forum press conference in Mumbai | Photo credit: FRANCIS MASCARENHAS

The Nasscom Annual Strategic Review for 2026 forecast a 6.1 percent increase in revenue to $315 billion in FY26 and stated that AI is now making a very meaningful contribution to revenue and growing at a significant pace. 2025 marked a decisive turning point for the Indian technology industry, where AI moved from experimentation to function-specific and measurable ROI and results-oriented transformation.

To remain competitive, many providers also strive for inorganic growth. About 70 percent of the top 25 vendors acquired native AI capabilities in the past year, which is significant in terms of how they are adding capabilities. About 85 percent of their top 25 providers have some form of agent platform.

“There is also a clear trend towards verticalization, with 35-40 percent of the top 25 vendors offering domain- and vertical-focused agentic AI platforms,” Rajesh Nambiar, president of Nasscom.

Speak with business linePallav Jain, Senior Partner at McKinsey &Company, said it is clear from client conversations that AI will be a differentiator in terms of RoI.

“Now there is a belief that AI, especially with the agent technology, is really disruptive. So what the CEOs are concerned about is that if I lag behind, my competitor could have an advantage in terms of efficiency. And they could invest that in different ways to disrupt my business,” Jain said.

So, industry leaders are rethinking offerings and operating models in an AI-first era. GCCs are shifting scale to strategic ownership and a deeper mandate for critical functions, while BPM companies are reinventing themselves by combining AI and data to go beyond RPA, from automating tasks to enabling decision-making. At the same time, ER&D embeds intelligence directly into products and systems, with providers taking increasing ownership of the life cycle instead of making fixed agreements. Throughout these shifts, new segments are emerging, such as AI specialists, accelerating capacity building, co-innovation and go-to-market for AI-led transformation.

Muted recruitment

The sector’s workforce grew by 2.3 percent, supported by large-scale training efforts. More than 20 lakh professionals have been upskilled in AI, including 2-3 lakh in advanced AI skills.

“AI is accelerating productivity and changing the nature of work, but it is also pushing the boundaries of what is possible. As AI becomes embedded in roles, we will see roles reimagined around outcomes, deeper specialization and significantly higher AI proficiency. The industry focus is on building ‘Human + AI’ teams, investing in ongoing skills and turning efficiency gains into growth, creating new jobs and new career paths, even as execution becomes more agile and resilient,” says Sindhu Gangadharan, chairman of Nasscom.

GCCs and ER&D remained the growth engines by significant margin going forward, while niche engines are reaching critical mass, with cybersecurity, data analytics, cloud and GCC-as-a-service becoming increasingly embedded across multiple segments.

Nasscom also reported that 86 percent of CXOs expect business demand to remain stable or increase in CY26, while 56 percent expect full-year growth. 90 percent of CXOs report increasing AI allocation within digital budgets in CY26, indicating AI is moving from discretionary experimentation to scaled deployments aligned with measurable outcomes.

Published on February 24, 2026