The increasing adoption of generative artificial intelligence (GenAI) is set to transform India’s IT sector, with productivity gains of between 43 per cent and 45 per cent predicted over the next five years, according to a recent survey by EY India. The study, which spans nearly 500 roles across the industry, highlights a dual benefit: IT firms are integrating GenAI internally to streamline operations, and more client projects are transitioning from proof of concept to full-scale production.
Top IT companies such as Tata Consultancy Services and Infosys are already at the forefront of this technological shift. EY India’s survey found that an impressive 89 per cent of these organisations have commenced trialling GenAI projects, with 33 per cent of those projects already in production. “Enterprises are moving beyond experimentation to putting AI into production at scale. The rapid transition from POC to enterprise-wide adoption reflects the industry’s confidence in AI’s potential,” said Abhinav Johri, a technology consulting partner at EY India.
The survey forecasts that roles in software development will enjoy the largest productivity boost – an estimated 60 per cent increase – followed by a 52 per cent improvement for business process outsourcing (BPO) services and 47 per cent for IT consulting. Together, these three sectors are expected to account for between 50 and 60 per cent of the overall productivity uplift in tech services.
The impact of GenAI, however, extends far beyond mere numbers. Executives surveyed by EY India pointed to significant enhancements in customer service, cost reduction, and revenue growth. “The integration of GenAI is not just about efficiency gains; it’s about transforming the entire business model. It’s enabling companies to innovate and offer more competitive solutions to their global clientele,” added Johri.
India’s IT industry, valued at approximately $254 billion, has long been recognised as a global powerhouse in software and technology services. The infusion of GenAI represents a pivotal moment for the sector as it seeks to drive the next phase of growth and innovation. By automating routine tasks and enhancing decision-making processes, AI technologies are enabling companies to focus on high-value activities that drive strategic outcomes.
According to EY India’s research, the productivity boost is driven by two primary factors. Firstly, internal adoption of GenAI is allowing IT firms to optimise their operations by automating repetitive tasks, thereby freeing up staff to focus on more complex and creative endeavours. Secondly, the accelerated movement of client projects from proof of concept to production is allowing companies to rapidly commercialise new ideas, thereby delivering tangible benefits to their customers.
Industry experts believe that these changes will not only improve operational efficiencies but also strengthen the competitive position of India’s IT sector on the global stage. “We are witnessing a paradigm shift in how technology services are delivered,” observed one analyst. “As more companies embrace GenAI, the cumulative effect on productivity and innovation could be transformative.”
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The EY India survey is one of several studies underlining the profound impact that AI technologies are expected to have across industries worldwide. For India’s IT sector, this represents a significant opportunity to enhance its service delivery model, boost revenue growth, and maintain its status as a leader in global technology innovation.
The report also highlighted an emerging need for workforce upskilling. As GenAI becomes increasingly embedded in everyday operations, there will be a critical requirement for training and development initiatives to ensure that employees can effectively leverage these advanced tools. “To fully realise the productivity gains promised by GenAI, companies must invest in reskilling their workforce. This is not merely a technological challenge but also an organisational one,” said Johri.
As the industry braces for a period of rapid transformation, the outlook for India’s IT sector appears brighter than ever. With GenAI set to deliver a significant boost in productivity and efficiency, the next five years could see a complete redefinition of technology service delivery, solidifying India’s position as a global leader in the digital economy.
