India’s information technology industry has spent the past two years confronting a difficult question: will artificial intelligence eventually reduce the need for the very services that made Indian IT a global powerhouse?
KKR’s latest Thoughts From the Road report offers a more optimistic answer. It said that AI could become the next leg of growth for the country’s technology companies rather than simply a source of disruption.
“Global Capability Centers are increasingly taking the baton from traditional IT services as an important growth engine,” KKR said in its October 2026 report. It also pushed back against the view that AI is a threat to Indian IT, saying that as technology companies embed AI into their service delivery systems, it is likely to become “the next leg of growth rather than only a source of disruption.”
This marks an important shift in the way India’s technology opportunity could evolve. For years, the country’s IT services model was built largely around access to a large pool of skilled professionals who could deliver software development, technology consulting and business services at competitive costs.
AI changes that equation. But instead of eliminating India’s advantage, KKR believes Indian technology companies can use AI to make their existing services more productive and potentially expand what they can offer clients. The opportunity is also moving beyond traditional outsourcing.
KKR sees GCCs increasingly becoming an important growth engine for India’s services exports. These centres are evolving from back office operations into more specialised technology, engineering and business functions, creating another channel through which global companies can deploy technology and talent in India.
The broader backdrop is equally important. KKR estimated global AI related compute spending could reach about $8 trillion between 2026 and 2030, with US hyperscalers accounting for more than 75% of the spending. The key question for India is therefore not simply whether AI will replace IT jobs, but how much of this enormous investment cycle Indian companies can capture.
For Indian IT, the next phase may therefore be less about selling manpower and more about selling AI enabled productivity, specialised capabilities and business outcomes. If that transition succeeds, AI may not mark the end of India’s IT story. It could become the beginning of its next one.
