Delay in Adapting to AI May Erode India’s Progress, Says NITI Report

Hyderabad: India risks losing its hard‑won edge in global technology services if it does not transform itself into the world’s AI‑native architect, said a Niti Aayog roadmap for the country’s information technology sector.

The report, ‘India’s Technology Services – Reimagination Ahead’, was unveiled by Commerce and Industry Minister Piyush Goyal, in the presence of IT secretary S. Krishnan. The report pegs the sector’s current contribution at about 7 per cent of GDP and annual revenues of around $265 billion.

The report sets a bold target of tripling revenue to $750 billion to 850 billion by 2035 to sustain a 7-8 per cent share of GDP and raise India’s global market share to over 25 per cent.

The report cautioned that on present trends, the industry may reach only $500 billion-580 billion, leaving a $250-300 billion shortfall that must be bridged through new growth engines rather than more of the same.

The roadmap paints a mixed picture for the Indian IT sector. Post‑pandemic, growth has slowed to 4-5 per cent, margins are under pressure, and AI‑led automation is compressing labour‑intensive service models.

Heavy dependence on the US market, tightening visa and data regimes, and rising geopolitical and trade frictions add to the headwinds. At the same time, India’s huge talent base and data advantage offer what the report calls a “historic opportunity” in the AI decade.

To seize it, the roadmap proposes a twin strategy: “protect the core” in areas like data and AI services, cloud, digital transformation, engineering and cybersecurity, while “pivoting” into five frontier plays – agentic AI, software and SaaS, AI‑ready infrastructure and data centres, innovation and frontier technologies, and an “India for India” domestic market push.

One striking opportunity lies in infrastructure. India already generates about 20 per cent of global data but has only 1.4 GW of data‑centre capacity. The report calls for scaling this to 10-12 GW by 2035, building GPU‑rich, AI‑ready facilities and monetising open data sets through high‑value analytics services.

The report stressed that the core challenge was not job loss but job transition by stating that between 75 lakh and 80 lakh technology workers need reskilling, with about 15 lakh jobs at particular risk without proactive redeployment. The report closes with a clear warning — delay in adapting to AI could erode decades of progress, but timely, coordinated action could make India the preferred global partner in the AI era.