India's Tech Industry Growth Forecast to Remain Muted, Recovery Anticipated by 2027-2030

India's tech industry revenue expansion is projected to remain muted with a 5-7% growth over 2027-30, according to Nasscom-McKinsey's forecast. Demand for productivity is expected to intensify, leading to compression in legacy service lines, while expanding segments like Data and AI, which will sustain strong growth of 12-15%. The future of tech services will be hybrid, with humans and AI agents working together to deliver speed, scale, and trust.

India's tech industry is poised for a muted revenue expansion, with projections indicating a 5-7% growth over the period 2027-30, according to Nasscom-McKinsey's forecast. This growth, while steady, is expected to be driven primarily by intensifying demand for productivity, which will lead to a compression of legacy service lines. Meanwhile, segments such as Data and AI are anticipated to sustain strong growth, with projections of 12-15% expansion.

Microsoft India President Puneet Chandok has highlighted the country's leadership in AI-driven transformation, noting that India is one of the most exciting markets for technology and AI. According to the recent Microsoft 2025 Work Trend Index, 93% of Indian leaders intend to use AI agents to extend workforce capabilities in the next 12-18 months. This commitment underscores the country's strategic focus on integrating AI across organizations, with 90% of companies reassessing their core strategies with AI, compared to a global average of 82% [1].

The future of tech services in India is expected to be hybrid, with humans and AI agents working together to deliver speed, scale, and trust. This hybrid model is likely to be a key driver of growth in the tech industry, as it allows for the efficient use of both human expertise and AI capabilities.

Microsoft's commitment to India is evident in its plans to invest USD 3 billion in cloud and AI infrastructure over the next two years, with a focus on skilling 10 million people in AI skills. This investment underscores the company's belief in the economic ties that drive global growth and its deepening commitment to the Indian market [1].

In conclusion, while India's tech industry revenue expansion is projected to be muted, the growth in Data and AI segments, driven by a hybrid model of human-AI collaboration, suggests a promising future. The industry's focus on productivity and strategic integration of AI is likely to position it for sustained growth in the coming years.

References:
[1] https://www.thehindubusinessline.com/info-tech/economic-ties-driving-global-growth-india-an-exciting-market-for-tech-ai-microsoft-india-prez/article69971379.ece