Indian IT Faces Its Kodak Moment

An anonymous reader shares a report: Generative AI offers remarkable efficiency gains while presenting a profound challenge for the global IT services industry -- a sector concentrated in India and central to its export economy. For decades, Indian technology firms thrived by deploying their engineering talent to serve primarily Western clients. Now they face a critical question. Will AI's productivity dividend translate into revenue growth? Or will fierce competition see these gains competed away through price reductions? Industry soundings suggest the deflationary dynamic may already be taking hold. JPMorgan's conversations with executives, deal advisors and consultants across India's technology hubs reveal growing concern -- AI-driven efficiencies are fuelling pricing pressures. This threatens to constrain medium-term industry growth to a modest 4-5%, with little prospect of acceleration into fiscal year 2026. This emerging reality challenges the earlier narrative that AI would primarily unlock new revenue streams.

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