Indian IT Outlook 2026 presents a sector at a turning point. India’s USD 280-billion IT industry is entering the next year amid tighter visa rules, geopolitical uncertainty, and trade friction, even as artificial intelligence and global capability centres (GCCs) emerge as powerful growth engines. The balance between these headwinds and opportunities will define how the industry performs in the coming cycle.
One of the biggest challenges shaping the Indian IT Outlook 2026 is heightened scrutiny of the US H-1B visa programme. Proposals such as a USD 100,000 fee for new visas and discussions around a potential outsourcing tax have complicated cross-border delivery models.
Although clarifications later eased immediate panic, concerns around social media screening and processing delays continue to create uncertainty. With the US remaining the largest export market, visa policy shifts carry real financial implications.
Analysts warn that sharply higher visa costs could add hundreds of millions of dollars to expenses for large IT firms. This pressure is accelerating a long-term shift toward offshore delivery and non-US hubs.
Industry leaders argue that Indian IT companies have already reduced dependence on onsite staffing by increasing local hiring in the US and strengthening India-based delivery centres. In this sense, visa stress is reinforcing trends already underway.
Geopolitical tensions and global trade friction are also reshaping client strategies. While they cloud short-term visibility, they are encouraging multinational firms to expand GCC operations in India.
These centres help companies manage regulatory risk, control costs, and access deep technology talent. As a result, global uncertainty is indirectly strengthening India’s position in enterprise technology delivery.
The early months of 2025 were marked by muted client spending, particularly in the US and Europe, as enterprises cut discretionary budgets. However, sentiment improved as the year progressed. AI programmes matured, and the core BFSI segment stabilised globally. This recovery set the stage for a renewed focus on technology-led transformation heading into 2026.
AI has become central to the Indian IT Outlook 2026. Global technology leaders such as Microsoft and Google announced multibillion-dollar investments in data centres and sovereign AI infrastructure in India.
Microsoft, for instance, committed USD 17.5 billion to build cloud and AI capabilities, skills, and trust. These investments signal confidence in India’s digital public infrastructure and its ability to support AI adoption at population scale.
At the company level, signs of cautious optimism are emerging. Infosys raised its FY26 revenue guidance and announced its largest-ever share buyback, returning capital to shareholders.
HCL Technologies also improved its revenue outlook. These moves suggest that while growth remains modest, balance sheets are strong and leadership teams are preparing for an AI-driven upcycle.
At the same time, the industry is undergoing structural resets. Tata Consultancy Services announced layoffs affecting about two per cent of its workforce as part of a broader transformation to become “future ready.”
Across the sector, firms are redesigning delivery models around AI agents, automation, and workflow optimisation. Mergers and acquisitions have picked up pace as companies seek capabilities in cloud, data, and AI.
Despite the surge in AI investment, monetisation remains uneven. Experts note that AI is well past the hype phase but not yet a universal revenue engine. The real shift is toward agent-based, workflow-driven AI embedded directly into business processes. Revenue impact is expected where AI influences pricing, risk decisions, customer journeys, and core products rather than remaining a standalone tool.
GCC expansion stands out as one of the strongest themes in the Indian IT Outlook 2026. India is now home to thousands of GCCs across banking, insurance, technology, and manufacturing.
The segment is projected to reach USD 105 billion by 2030, supporting nearly 2.8 million jobs. Industry leaders expect GCC growth to accelerate further as global firms look for resilience and proximity to talent.
Looking ahead, 2026 is shaping up as a year of cautious resilience. Discretionary spending may improve, supported by stable budgets and targeted investments in next-generation technologies.
For an industry long associated with headcount-led growth, the shift toward AI-driven productivity marks a fundamental change. Strengthening AI leadership, building resilient delivery networks, and staying adaptable to macro volatility will determine who leads the next phase.
As Indian IT prepares for another year of change, adaptability remains its strongest asset. To stay updated on how AI, policy, and global trends are shaping the tech industry, visit ainewstoday.org for more AI news and insights.
