India’s technology sector, which has long been a driver of economic growth, is projected to witness slower revenue expansion in the coming years, according to a joint forecast by Nasscom and McKinsey. The report indicates that revenue growth will remain subdued through the mid-2020s, with recovery momentum likely to build between 2027 and 2030.

Global Slowdown Impacting Indian IT Exports

The muted growth outlook stems from global economic headwinds, reduced discretionary tech spending, and a slowdown in digital transformation projects in key markets such as the United States and Europe. While Indian IT services companies have continued to win large contracts, pricing pressures and delayed decision-making have impacted short-term growth prospects.

Long-Term Recovery Outlook

Despite near-term challenges, Nasscom and McKinsey project a stronger rebound toward the end of the decade. Factors expected to fuel this recovery include accelerated adoption of artificial intelligence, cloud services, cybersecurity solutions, and digital engineering. These emerging areas are poised to create new revenue streams for Indian technology companies.

Employment and Skills Shift

The report highlights that employment growth in the IT sector will also undergo a transition. While traditional roles may see slower hiring, demand for talent in AI, machine learning, data analytics, and advanced engineering is expected to surge. Nasscom has emphasized the need for reskilling initiatives to prepare the workforce for this transformation.

India’s Role in Global Tech Supply Chain

With geopolitical realignments and the push for digital sovereignty, India’s tech industry is positioned as a crucial partner for global enterprises. Analysts believe that India’s large talent pool, cost competitiveness, and evolving digital infrastructure will help it capture new opportunities as global demand revives.