Nasscom released its Annual Strategic Review, confirming that India’s technology sector is projected to reach $315 billion in revenue for FY26.
This represents a 6.1% year-on-year growth, a slight acceleration from the 5.9% growth recorded in FY25. The report highlights a significant “structural transition,” as the industry pivots from a scale-led delivery model to an orchestration-led model centered on Artificial Intelligence.
Revenue Breakdown by Segment
The $315 billion milestone is supported by broad-based growth across all major sub-sectors:
| Segment | FY26 Projected Revenue | Status/Trend |
| IT Services | $149 Billion | Remains the largest contributor (~47% share). |
| ER&D | $63 Billion | Fastest-growing segment; driven by Global Capability Centres (GCCs). |
| BPM | $59 Billion | Shifting from task automation to AI-led decision making. |
| Software Products | $23 Billion | Increasing focus on platformization and embedded IP. |
| Hardware | $21 Billion | Growth supported by domestic infrastructure and data centers. |
The “AI Inflection Point”
For the first time, Nasscom provided a specific estimate for AI-led revenue, which is expected to reach $10–$12 billion in FY26.
- Beyond Pilots: Enterprises have moved from experimentation to scaled, ROI-driven deployments.
- Upskilling: Over 2 million professionals have been upskilled in AI, with roughly 300,000 possessing advanced AI expertise.
- Inorganic Growth: 70% of the top 25 service providers acquired AI-native firms in the past year to bolster their capabilities.
The Decoupling of Revenue and Jobs
A key takeaway from the 2026 report is the widening gap between revenue growth and headcount expansion. While revenue is growing at 6.1%, the total workforce is expected to grow by only 2.3%.
- Headcount: The industry is expected to add 135,000 net new jobs in FY26, bringing the total workforce to 5.95 million.
- Productivity Gains: The slowdown in hiring is attributed to AI-driven automation and a shift toward “Human + AI” teams, where productivity gains are increasingly passed through to clients.
- GCC Dominance: Global Capability Centres (GCCs) continue to be the primary engine for high-value hiring, with 83% of Indian GCCs now investing heavily in Generative AI.
Export vs. Domestic Performance
- Exports: Projected to rise 5.6% to reach $246 billion. While North America remains the primary market, growth is significantly faster in the Asia-Pacific (APAC) and Middle East regions.
- Domestic Market: Expected to grow at a faster clip of 7.9%, driven by India’s internal digital transformation and the expansion of domestic data centers.
“FY26 and FY27 will be defined as investment years. We are moving from a period of resilience to one of renewal, where the focus is on shaping how global technology is reimagined and governed.” — Rajesh Nambiar, President of Nasscom.
