The tech sector is poised for a big leap, with the industry expected to add 125,000 new jobs in FY25 — more than double the jobs it had added (60,000) in the previous year, Nasscom said on Monday.
In its annual strategic review for 2025, Nasscom also projected the industry revenue to increase to $282.6 billion in FY25, growing at a steady 5.1%. By FY26, the industry is expected to surpass the $300-billion revenue mark.
The expansion comes as the IT industry rebounds after nearly 18 months of slowdown due to macroeconomic pressures in key markets such as the US and Europe. Despite earlier downward revisions in employment projections for FY24, Nasscom now estimates that the total workforce in the sector will reach 5.8 million employees by the end of FY25.
According to Nasscom chairperson Sindhu Gangadharan, enhanced AI implementation, the rise of agentic AI, and the growing maturity of global capability centres (GCCs) as value hubs are reshaping industry dynamics. The sector is witnessing a transformation, led by engineering research & development (ER&D), GCCs, and business process management (BPM), which are driving demand for skilled talent.
Several factors are contributing to the industry’s growth. The IT services sector is projected to grow by 4.3% in FY25, reaching $137.1 billion in revenue. The ER&D segment is the fastest-growing, with a 7% increase expected, pushing its total revenue to $55.6 billion. Business process management revenues are anticipated to grow by 4.7%, reaching $54.6 billion. BFSI, healthcare, and retail are increasingly adopting digital engineering, with nearly two-thirds of large deals focusing on this transformation. Domestic revenues are projected to grow at 7% to $58.2 billion, outpacing export growth, which stands at 4.6%, taking total exports to $224.4 billion.
The industry now boasts of over 1,760 GCCs, with these entities employing approximately 1.9 million professionals. The revenue generated by Indian service providers and global multinational corporations (MNCs) through their GCCs is now nearly evenly split, signifying a balanced contribution to the industry’s expansion.
Artificial intelligence (AI), cloud computing, cybersecurity, and data analytics are at the forefront of technological investments. Nasscom’s tech industry CEO Survey 2025 indicates that 63% of tech CEOs expect AI investments to account for more than 10% of their overall tech spending in FY26. Moreover, over 90% of the top 20 IT service companies are actively integrating AI, cloud, and data analytics into their operations.
AI is becoming a critical force in reshaping business operations, with over 55% of AI activity in the Indian tech industry focused on long-term co-creation partnerships. These collaborations aim to build scalable, future-ready AI solutions. Around 10-15% of enterprise AI proof-of-concepts (PoCs) are transitioning into full-scale production.
Despite global economic uncertainties, industry leaders remain optimistic about the future. Nasscom’s survey reveals that 77% of tech CEOs anticipate higher business growth in FY26, while 85% expect client tech spending to either remain stable or increase. Additionally, 45% foresee an improved hiring environment in FY26 compared to the previous year, reinforcing the sector’s resilience.
Rajesh Nambiar, president, Nasscom, highlighted the importance of workforce transformation, stating that India’s tech skill intensity will be a critical driver of future growth. While the CEO outlook remains measured, yet positive, increased tech and AI spending will be essential to sustaining momentum. Upskilling in niche and core tech areas will remain of paramount importance for the industry.
The digital economy continues to expand at a rapid pace. The country’s e-commerce sector is growing at an annual rate of 35%, with gross merchandise value (GMV) projected to approach $200 billion. Increased investments in enterprise software, cloud computing, and a 21% rise in data centre capacity have further propelled domestic technology spending, which has outpaced export growth for the second consecutive year.
The broader digital economy now contributes approximately 12% to GDP, with digital public infrastructure alone adding 1% in value. This reinforces India’s position as a global leader in digital transformation and innovation.