India’s $280-billion information technology industry is entering 2026 at a critical crossroads, balancing mounting global uncertainties with its most ambitious push into artificial intelligence and global delivery transformation to date.
Heightened scrutiny of the US H-1B visa programme,including proposals such as a steep $100,000 fee for new visas and discussions around an outsourcing tax, has added fresh pressure on Indian IT firms that depend heavily on the US market. The United States remains the single largest export destination for India’s IT services sector.
Visa Curbs Trigger Strategic Shift
Policy signals from the US in late 2025 rattled markets and disrupted employee mobility, briefly dragging down IT stocks. Although later clarifications eased some concerns, fresh issues—such as social media screening and processing delays—continue to create uncertainty for companies relying on onsite staffing models.
Analysts warn that sharply higher visa costs could add hundreds of millions of dollars to operational expenses for large Indian IT firms. This has accelerated a long-term shift toward offshore delivery models, increased hiring within the US, and expansion into non-US global hubs.
Industry leaders maintain that Indian IT companies have already de-risked their dependence on H-1B visas by strengthening India-based delivery and building local talent pools abroad.
AI Becomes the Growth Engine
After a muted start to 2025 due to cautious global client spending, momentum picked up as enterprise AI adoption gained scale. Banking, financial services, and insurance—India IT’s largest revenue vertical—also showed signs of stabilisation.
Global tech giants such as Microsoft and Google announced multibillion-dollar investments in AI infrastructure and data centres in India, reinforcing the country’s role as a critical digital and AI hub. Microsoft alone committed $17.5 billion toward cloud, AI infrastructure, and skilling initiatives in India.
Among Indian majors, Infosys raised its FY26 revenue outlook and announced its largest-ever ₹18,000 crore share buyback, while HCL Technologies also upgraded its growth guidance.
Workforce Reset and Structural Changes
Even as AI investments surge, workforce restructuring has become a defining trend. Tata Consultancy Services announced layoffs affecting around 2% of its global workforce as part of a broader transformation focused on AI adoption, automation, and future-ready skills.
Across the sector, firms have accelerated GenAI training, redesigned delivery models around AI agents, and stepped up mergers and acquisitions to plug capability gaps. However, experts caution that while AI adoption is advancing rapidly, full-scale monetisation is still evolving.
GCCs Strengthen India’s Global Role
Global Capability Centres (GCCs) are emerging as a major growth lever for India’s tech ecosystem. The segment is expected to grow to $105 billion by 2030, employing nearly 2.8 million people across more than 2,400 centres.
Multinational corporations are increasingly viewing India as a strategic base to manage regulatory risks, control costs, and access deep technology talent—especially amid global trade and geopolitical uncertainty.
Looking Ahead to 2026
Experts describe 2026 as a year of cautious optimism for Indian IT. While macroeconomic volatility and regulatory risks remain, improved discretionary spending, expanding GCC footprints, and deeper AI integration are expected to drive resilience.
As the industry moves forward, success will depend on strengthening AI leadership, building flexible global delivery networks, and staying agile in a rapidly changing geopolitical and economic landscape.
