AI volumes may outweigh revenue deflation for IT sector by FY30: Report - The Tribune
AI volumes may outweigh revenue deflation for IT sector by FY30: Report - The Tribune
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AI volumes may outweigh revenue deflation for IT sector by FY30: Report
AI volumes may outweigh revenue deflation for IT sector by FY30: Report
Updated At :
01:38 PM Aug 22, 2026 IST
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New Delhi [India], August 22 (ANI): Artificial intelligence (AI) could become a net growth driver for India's IT services industry over the longer term, with AI-led volumes potentially outweighing revenue pressure from automation by FY30, according to a report by CLSA.
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The report further warned that near-term growth remains constrained by weak macroeconomic conditions and softer discretionary demand.
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CLSA said the industry is facing "multiple macro/micro headwinds", but expects AI to eventually create new growth opportunities. It said AI could initially compress revenues as productivity gains are passed on to clients, but "AI volumes could supersede deflation by FY30."
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The brokerage expects the industry's US-dollar revenue growth to reach mid- to high-single digits by FY31, supported by increasing AI-related demand. It also sees a potential industry growth inflection over the next 18-24 months, with FY28 emerging as an important period for stronger growth.
"Near term negative but long term positive" is CLSA's assessment of AI's impact on systems integrators. The brokerage said it prefers to believe that AI will eventually provide strong growth opportunities despite near-term revenue compression.
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It also said there is currently no evidence of a major contraction in large deals or IT-services budgets among large global companies because of AI.
AI spending itself is expected to expand sharply. According to CLSA and IDC estimates cited in the report, generative AI's share of ov