By Govind Rammurthy
Tata Consultancy Services (TCS) recently denied losing the Marks & Spencer account due to a cyberattack. While technically true, the company’s declining UK revenues suggest a deeper challenge. For decades, India’s IT services industry thrived on one promise – high-quality delivery at a fraction of Western costs. But that equation is changing fast, and the industry is yet to confront it fully.
India’s IT sector became the world’s back office by offering abundant, low-cost talent. But AI is rapidly dismantling this advantage. Tools like GitHub Copilot, ChatGPT, and Claude Code can already write production-level code – they don’t get tired, never demand training, and cost little to operate. According to GitHub’s 2024 State of the Octoverse report, 92% of developers now use AI coding assistants, with productivity gains of up to 55% for routine tasks. They may make occasional errors, but so do human developers—and AI is improving much faster.
For routine maintenance and development, AI’s consistency, precision, and scalability now rival human performance. Soon, clients won’t compare Indian and Western programmers by hourly rates; they’ll compare humans against AI. The choice will hinge on what humans can offer beyond efficiency – creativity, oversight, and above all, trust.
Even India’s long-held English proficiency edge is fading. AI now translates and communicates flawlessly across languages, enabling developers from China, Brazil, or anywhere to engage clients in New York as effectively as someone in Bengaluru. The twin pillars of India’s dominance – cost and communications – are crumbling.
Recent security incidents have turned into an existential threat for India’s IT model. The £300-million Marks & Spencer breach, allegedly via a contractor, and the £1.9-billion cyberattack that disrupted Jaguar Land Rover operations, both linked to TCS-managed systems, have drawn scrutiny. Similarly, Cognizant faces a $380-million lawsuit from Clorox over an attack exploiting its helpdesk.
IBM’s 2024 Cost of a Data Breach Report found that breaches in the technology and services sector now average $5.17 million per incident, but reputational damage often exceeds direct costs by multiples. These cases have raised doubts about whether Indian firms can be trusted with critical data and systems.
HFS Research estimates that for every cyberattack made public, several go unreported – pointing to a systemic vulnerability. At eScan, we’ve observed procurement conversations shift dramatically. Today, clients don’t just evaluate technical capability; they demand proof against social engineering and insider breaches, asking for evidence of zero-breach track records and contractual liability for security failures. The focus has shifted from detection to prevention and from compliance to resilience.
The transformation that Japan’s automakers achieved offers a valuable parallel. Once dismissed as cheap, “Made in Japan” became a global symbol of reliability through an uncompromising culture of quality. Indian IT companies can similarly rebuild global confidence by embedding security, precision, and transparency into their DNA.
To survive the AI era, Indian IT services must move from cost efficiency to trust leadership. That means enforcing every security protocol, prioritising verification even at the expense of convenience, and designing systems with protection at their core.
As AI makes cost irrelevant, trust will decide survival. Clients will have no shortage of low-cost options but will choose partners they can fully trust with their sensitive data and most important systems. For TCS, Infosys, Wipro, and Cognizant, the real question is: will they evolve fast enough- or will clients make that choice for them? The recent UK revenue trends suggest that the shift has already begun. The rest of the industry would do well to take note.
The writer is CEO & MD, eScan
