“Over the next three to five years, we will see an accelerated rise of hybrid teams, reshaping delivery models, productivity benchmarks, and pricing frameworks toward outcome-driven models,” Nasscom President Rajesh Nambiar said.
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While India’s tech services industry will retain a relative growth edge, revenue expansion is projected to remain muted with recovery anticipated between 2027–30, yielding a 5-7% growth over a 5-year period, as per an industry outlook released by Nasscom on Tuesday (August 26, 2025) in association with McKinsey & Company.
During this period, demand for productivity is expected to intensify, leading to compression in some legacy service lines while expanding some segments like Data and AI segments which are expected to sustain strong growth of around 12-15%, according to the forecast by the industry apex body.
On trends to watch out for, Nasscom said, enterprises would be rebalancing budgets toward AI to unlock value creation. However, there would be wide dispersion across verticals, and few micro verticals would dominate investments. Also, mid-tier enterprises would be keen to accelerate tech adoption.
The apex body also predicted that demand for bankable productivity gains would rise in the near term (12-24 months), leading to compression in current spending. It further said, with Agentic AI, tech providers would be able to unlock a new spend pool of $300-500 billion.
According to Nasscom-McKinsey analysis, the future of tech services will be hybrid, where humans and AI agents will work together to deliver speed, scale, and trust. Together, these models will signal a new era where collaboration between people and intelligent agents becomes the default in technology services.
Rajesh Nambiar, President, Nasscom, said, “The future of technology services will not be defined by choosing between human expertise and AI-driven automation, but by the powerful convergence of the two. Over the next three to five years, we will see an accelerated rise of hybrid teams, reshaping delivery models, productivity benchmarks, and pricing frameworks toward outcome-driven models.”
India was uniquely positioned to lead this shift, but it would require a fundamental reimagination and a renewed focus on reskilling and cross-skilling talent at scale, he added.
The global technology services market was entering a phase of both promise and pressure, as Agentic AI was opening up significant new growth arenas, said Noshir Kaka, Senior Partner, McKinsey & Company, adding, “However, it needs a reset of the industry operating model to both counter near term headwinds and build for the AI era – Investing more in R&D to build competitive IP, reinvent existing offerings and building talent pools for new skills.”
Published – August 26, 2025 09:36 pm IST
