AI Revolution or Stagnation? Why Indian IT Risks Losing the AI Race

India’s IT Industry Faces a Gen AI Adoption Dilemma

India's IT-enabled services (ITeS) sector is at a crossroads. While over 80% of developers acknowledge the transformative power of Generative AI (Gen AI), actual adoption remains below 40%, according to the latest report from Boston Consulting Group (BCG). This slow uptake raises concerns about India's ability to maintain its global leadership in IT services.

Global AI Investments Surge While India Lags

As countries like the U.S., China, the EU, and the Middle East aggressively expand their Gen AI capabilities, India’s hesitation could prove costly. For decades, India has been a powerhouse for global IT services, managing complex coding, software development, and digital transformation. However, with Gen AI reshaping how software is built, tested, and deployed, the industry must adapt quickly or risk falling behind.

BCG's report warns that clinging to traditional methods will not be enough in the AI-driven future. Organizations must fully integrate Gen AI into their workflows to stay competitive.

Challenges Hindering Gen AI Adoption

Despite widespread awareness, several obstacles prevent Indian IT firms from fully embracing Gen AI:

1. Lack of Tailored Training Programs: While companies are investing in large-scale training sessions, many fail to offer project-specific learning paths.
2. Absence of Gen AI Centers of Excellence: Unlike global counterparts, few Indian firms have dedicated research and development hubs for AI.
3. Limited Incentives for AI Skill Building: Gamification, certifications, and career growth incentives are lacking, reducing motivation for developers to upskill in AI.
4. Resistance to Behavioral and Process Change: Scaling AI is not just about access to technology but also about transforming workflows and organizational culture.

Expert Insights on Overcoming the AI Adoption Gap

Sambhav Jain, MD and Partner at BCG, suggests a three-step approach to boost Gen AI adoption:

• Move Beyond Mass Training: Custom proficiency-based learning paths should be introduced to cater to the specific needs of different projects.
• Establish Gen AI Centers of Excellence: These hubs can drive research, innovation, and practical AI integration.
• Create AI Skill-Building Incentives: Organizations should implement gamification, certifications, and career growth opportunities to encourage AI adoption.

Agentic AI: The Next Frontier Requires a Strong Gen AI Foundation

The report highlights that Indian IT firms cannot expect to implement advanced AI technologies like Agentic AI without first establishing a solid Gen AI foundation. Skipping this critical step would leave businesses ill-equipped to compete in an increasingly AI-driven world.

The Way Forward: Embracing Gen AI for a Competitive Edge

To maintain its dominance in IT services, India must act swiftly. The key lies in:

• Strategic AI Investments: Companies should allocate resources to AI research and development.
• Workforce Upskilling: Developers need access to specialized AI training and real-world implementation opportunities.
• Process Transformation: Businesses should focus on integrating AI into existing workflows rather than treating it as a separate entity.

A Wake-Up Call for Indian IT

The message from the BCG report is clear—India’s IT sector must move beyond acknowledging Gen AI’s potential and start implementing it at scale. With global competitors racing ahead, the time to act is now. Organizations that invest in AI today will be the leaders of tomorrow, while those that hesitate risk being left behind.