What happened
Citrini Research's "The 2028 Global Intelligence Crisis" report states India's IT services giants, including Tata Consultancy Services (TCS), Infosys, and Wipro, face accelerating contract cancellations. AI coding agents perform similar work at marginal cost, eroding the labour arbitrage model underpinning India's $200 billion annual IT export industry. Procurement teams use AI-assisted development, securing significant discounts; one Fortune 500 firm renewed a contract at a 30% reduction.
Why it matters
This shift directly impacts procurement teams and platform engineers, who can now reduce software development costs by using AI tools for internal builds, bypassing traditional outsourcing models. The erosion of India's IT export revenue, a key contributor to its current-account balance, could destabilise the rupee and strain macroeconomic stability. This creates tension with recent Indian government and private sector commitments to invest heavily in AI infrastructure, highlighting a potential conflict between domestic AI adoption and its impact on established export-driven industries.
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