NITI Aayog Calls For AI-Led Overhaul Of India’s Technology Services Industry

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Last Updated: 13th February 2026 - 02:12 pm

Summary:

NITI Aayog has called for a restructuring of India’s technology services sector, warning that the traditional labour-intensive IT services model will not support long-term growth. In a new ten-year roadmap, the think tank said the industry must shift towards artificial intelligence-led, IP-driven and outcome-based delivery models to remain globally competitive.

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In its roadmap titled Technology Services - Reimagination Ahead, NITI Aayog said India’s technology services industry, valued at about $265 billion and contributing nearly 7% to GDP, is already seeing growth slow to around 4–5%. The report attributed this to rising automation, changing client demand and broader global economic shifts.

It cautioned that expanding workforce strength alone will no longer be sufficient to sustain scale or margins.

AI And IP Seen As Central To Future Growth

The report said artificial intelligence is reshaping how technology services are bought and delivered. Clients are increasingly seeking measurable outcomes and platform-led solutions rather than manpower-driven contracts.

NITI Aayog said firms will need to focus more on building intellectual property, AI-native platforms and outcome-linked services instead of relying on cost advantages and large employee bases.

Five Focus Areas Outlined

The roadmap identified five priority areas for the sector’s transition: agentic AI, software and products, digital infrastructure, innovation-led engineering, and India-focused solutions. These are expected to support both domestic demand and global expansion.
Companies that do not adapt, the report said, risk remaining in low-margin segments of the services market.

Policy And Workforce Changes Flagged

NITI Aayog also highlighted the need for policy support, including streamlined regulatory processes, stronger research and development ecosystems and large-scale reskilling of the workforce for AI-enabled roles.

The report said clarity on issues such as talent mobility and employee stock ownership would be important to support product-led and innovation-driven technology firms, as the sector adjusts to a more AI-centric operating model.

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