TLDR: A new report by Nasscom and McKinsey & Company reveals that Agentic AI will be a pivotal force in India’s technology services sector, projected to unlock $300-500 billion in new spend pools. This shift will usher in an era of hybrid human-AI teams, demanding significant investment in reskilling and new operating models.
Bengaluru, August 26, 2025 – Artificial Intelligence (AI), particularly the emergence of Agentic AI, is set to revolutionize India’s technology services industry, potentially unlocking a massive $300-500 billion in new opportunities. This is according to a new report titled ‘Future of Technology Services: Leading with AI’, compiled by Nasscom in collaboration with McKinsey & Company.
The report highlights that the period between 2020 and 2025 saw profound transformations in the tech services sector, driven by pandemic-induced digital acceleration, the disruptive rise of AI, and evolving geopolitical landscapes. As global enterprises now re-evaluate their technology expenditures, AI is emerging as a crucial differentiator, with a growing portion of budgets being allocated towards AI-driven productivity and innovation.
While India’s tech services industry is expected to maintain its competitive edge, revenue growth is anticipated to be modest in the immediate future, with a stronger recovery projected between 2027 and 2030. The report forecasts a 5-7% growth over a five-year period. It also indicates that traditional service lines may experience contraction, while demand for data and AI segments is poised for robust growth, estimated at 12-15% over the next five years.
Global Capability Centers (GCCs) in India are expected to play an increasingly vital role, transforming into global innovation hubs for enterprises. Rajesh Nambiar, President of Nasscom, emphasized that the future of technology services will be defined not by a choice between human expertise and AI automation, but by their powerful convergence. “Over the next three to five years, we will see hybrid teams reshape delivery models, productivity, and pricing frameworks. India is uniquely positioned to lead this shift, but it will require a major push on reskilling and reinventing service models,” Nambiar stated.
Noshir Kaka, Senior Partner at McKinsey & Company, underscored that Agentic AI presents a “once-in-a-generation” growth opportunity. However, he cautioned that this will necessitate a fundamental reset of the industry’s operating model, significant investment in research and development (R&D) to build competitive intellectual property, and the development of new talent pools equipped with advanced skills.
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The report concludes that for India to solidify its position as a global leader in technology services during the AI era, the industry must strategically defend its existing core services while rapidly adapting to AI-driven innovation, embracing new delivery models, and forging bold partnerships.
