Archive · 2 Oct 2025
Indian IT Sector Faces Subdued Growth, Eyes FY27 Rebound
The Indian IT sector is predicted to have slow growth in the coming year.
Experts expect that the IT sector's growth will be small during the current year, FY26.
But, they believe it could get better in FY27 due to new technology, like artificial intelligence (AI), and changes in the economy.
Big IT companies have reported good sales and contracts, but they expect growth to be slow.
Companies are also seeing project delays because of uncertain economic times.
But as businesses start using AI more, the IT sector could see growth in the future.
Indian IT sector faces subdued growth in FY26.
Recovery in FY27 is possible due to adoption of AI.
Key IT firms reported healthy deal bookings but restrained revenue growth guidance.
Geopolitical tensions and client cost optimization causes project delays.
AI is central to the next growth cycle for Indian IT services.
- Who
- Indian IT Sector
- What
- Experiencing subdued growth in FY26 with possible rebound in FY27
- When
- FY26 and FY27
- Where
- India
- Why
- Global macroeconomic uncertainty and AI adoption
Near Term Challenges
Long Term Prospects
Growth
Near Term Challenges
Expectations of muted growth in FY26.
Long Term Prospects
Potential for recovery in FY27 driven by AI.
Demand
Near Term Challenges
Weak near-term demand environment.
Long Term Prospects
Anticipated acceleration in demand for digital transformation and AI.
- FY26 Growth Outlook
- Muted, restrained at 1-5%
- Key Driver for FY27
- Enterprise-scale AI adoption
- Report Source
- HSBC Global Research
- TCS Q1FY26 TCV
- USD 9.4 billion
- Infosys Q1FY26 Bookings
- USD 3.8 billion in large deals
- Wipro Q1FY26 TCV
- USD 5 billion
Sources
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