India’s tech sector to hit US$ 286.6 bn revenue by FY’25

India’s tech industry is set for major expansion in FY25, with 125,000 new jobs expected—more than double last year’s additions. Revenue is projected to grow 5.1% to US$ 282.6 billion, driven by AI, cloud computing, and digital transformation. As hiring rebounds and investments rise, the sector is on track to surpass US$ 300 billion by FY26, reinforcing India’s position as a global tech leader.

India’s tech industry is set for strong growth in FY25, with the sector expected to add 125,000 new jobs, more than double the 60,000 jobs created last year, according to Nasscom’s annual strategic review for 2025. Industry revenue is projected to grow 5.1%, reaching US$ 282.6 billion, and is expected to surpass US$ 300 billion by FY26.

After an 18-month slowdown due to global economic pressures, the industry is bouncing back. Nasscom estimates that by the end of FY25, India’s IT workforce will reach 5.8 million employees. AI adoption, the rise of agentic AI, and the increasing maturity of Global Capability Centres (GCCs) are driving the transformation. Key sectors such as Engineering R&D (ER&D), Business Process Management (BPM), and IT services are fueling demand for skilled professionals.

The IT services sector is expected to grow by 4.3% in FY25, reaching US$ 137.1 billion, while ER&D is set to grow 7% to US$ 55.6 billion, making it the fastest-growing segment. BPM revenues are projected to rise 4.7% to US$ 54.6 billion. Domestic revenues will likely see 7% growth to US$ 58.2 billion, outpacing export growth of 4.6%, bringing total exports to US$ 224.4 billion.

GCCs continue to play a key role in the industry’s expansion, with over 1,760 GCCs employing 1.9 million professionals. Revenue generated by Indian service providers and global MNCs through GCCs is now nearly equal, reflecting a balanced contribution to growth.

Tech investments remain focused on AI, cloud computing, cybersecurity, and data analytics. According to Nasscom’s Tech Industry CEO Survey 2025, 63% of CEOs expect AI spending to exceed 10% of their total tech budget by FY26. Additionally, over 90% of the top 20 IT service firms are integrating AI, cloud, and data analytics into their businesses. More than 55% of AI initiatives are long-term partnerships aimed at scalable AI solutions, and 10-15% of enterprise AI proof-of-concepts (PoCs) are transitioning into full-scale production.

Despite global economic uncertainties, industry leaders remain optimistic. The survey indicates that 77% of CEOs expect higher business growth in FY26, while 85% believe client tech spending will either remain steady or increase. Additionally, 45% foresee a better hiring environment in FY26 compared to FY25. Rajesh Nambiar, Nasscom’s president, emphasized that India’s growing tech skill intensity will be crucial for sustaining long-term growth.

India’s digital economy is expanding rapidly, contributing 12% to GDP, with digital public infrastructure alone adding 1%. The e-commerce sector is growing at an annual rate of 35%, with GMV projected to hit US$ 200 billion. Investments in enterprise software, cloud computing, and a 21% rise in data center capacity have further boosted domestic tech spending, which has outpaced export growth for the second year in a row.