Indian IT sector will be powered by AI in 2025

The Indian IT sector enters 2025 with cautious optimism, buoyed by expectations of stronger tech spending and a healthier deal pipeline. As businesses make bold investments in Artificial Intelligence (AI), particularly Generative AI (GenAI), the industry anticipates a rebound in growth and profitability.

However, much depends on global macroeconomic conditions, including the stance of the incoming US administration on trade policies and high-skilled immigration, as President-elect Donald Trump prepares to return to the White House next month.

In Q2, IT heavyweights reported promising figures, sparking hopes of a surge in demand across the industry in the coming quarters. Analysts predict that growth and profitability metrics could see a notable uptick by late 2025 or the second half of FY26, contingent on stable global conditions.

The technology mergers and acquisitions (M&A) landscape is expected to remain active, with big data, cloud services, and GenAI leading the charge for companies seeking strategic acquisitions. Meanwhile, the IPO market, fueled by the high-performing tech sector in 2024, is primed for another strong year, with numerous tech startups gearing up for public listings to capitalise on the market’s optimism.

Generative AI, having gained significant momentum in 2024, is now poised to reshape industries globally, with non-tech sectors expected to undergo significant transformations in areas like marketing, operations, and R&D.