Indian IT Sector Is Looking Up: Are AI & Data Science Major Contributors

While businesses in India are experiencing a downturn in its growth due to the pandemic, the one sector which is thriving despite all odds is the Indian IT sector. Reports suggest that the domestic IT services sector is likely to see single to double-digit revenue growth in 2021-2022. The IT and technology sector has done relatively well in sustaining momentum during the crisis and is expected to accelerate more as the economy revives. 

The COVID-19 pandemic has left the companies to ride the digitisation wave for which they are increasingly relying on the use of emerging technologies. Also, the companies are moving their workforces towards remote working with an increased reliance on cloud-based workflows. This transition from traditional to tech-based workflows calls for a need to adopt different strategies. Companies are looking at AI and analytics to speed up their digital transformations projects. 

Reports suggest that for most IT companies, the impact of the pandemic is likely to be moderate and short term. As businesses are looking to get into the digital transformational journey, IT firms will bounce back into its regular business flow. 


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With digital transformation, automation and cloud-based solutions becoming the need of the hour to ensure business continuity, IT companies are fast moving towards these areas than the business process management and legacy applications side of it. Even IBM recently split its business division to focus solely on the hybrid cloud approach. 

The growth in the IT sector is also evident from the hiring that most domestic IT firms are going for. According to the recent news doing the rounds, India’s top four IT companies have hired over 17,000 people in the second quarter. These companies include TCS, Infosys, Wipro and HCL that are hiring in anticipation of the growth trajectory that they see ahead. In fact, the domestic IT sector has created the most number of jobs in the private sector in India. 

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AI & Data Science — The Growth Driver Of IT Sector

Analytics and data science capabilities have had a strong foundation in the Indian IT sector for the longest time. The data science domain has brought about transformational changes in many MNC and Indian IT companies over the years and are now emerging as a necessary capability transcending the entire business model and operation value chain of the firms.

As the IT industry is witnessing growth, the AI and data science function can be credited for this. While many businesses have contracted due to the pandemic, a report by AIMResearch forecasted that there would be no significant operations contraction for the analytics’ functions of domestic and MNC IT firms operating in India. 

When we talk about digital transformation journey, analytics offering is firmly integrated with the digital offering across almost all IT firms. It is necessary to bring about crucial insights on digital markets, ad spending, enterprise digital investment, to name a few. According to numbers, for IT firms, the digital business now contributes 25-30% of the current revenue portfolio — for which analytics is a key driver. The same report suggests that over the next five years, the digital business is expected to grow to 35% of IT revenues across the industry.

Not just in digital transformation, the internal analytics functions are also crucial in providing support to sales, client accounts, marketing, finance, and HR functions across IT organisations. 

The AI capabilities in IT companies have also begun to grow and show up its significance in terms of revenue. According to a report by AIM, IT and technology sector has the highest share of the AI market at 36.2% in percentage share, and $2314.3Mn in terms of market value. These numbers speak volumes about the significance AI domain has for the IT firms. Companies such as Accenture, Capgemini, TCS, Wipro, Tech Mahindra, HCL, among others, have a strong AI market share. 

Wrapping Up

These numbers are indicative of the fact that the AI and analytics domain are strong players when it comes to deciding the overall growth of IT firms in India and at a global level. As the companies are intensely looking to go into the AI way to ride the digital transformation wave, the Indian IT sector will continue to look up in the coming years. Even if there are any contractions, given the strong involvement of analytics and data science in IT, they will make up for it in the coming years if not months. 

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Srishti Deoras
Srishti currently works as Associate Editor at Analytics India Magazine. When not covering the analytics news, editing and writing articles, she could be found reading or capturing thoughts into pictures.

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