Artificial intelligence is not pushing multinational corporations away from India’s technology workforce. Instead, it is increasing their presence in the country while changing the kind of work they move here and the roles they hire for, according to a research note on India’s technology sector by Bank of America Securities, the institutional securities and investment banking arm of Bank of America, one of the largest financial institutions in the United States.
The brokerage said hiring will stay strong in the near-term, but companies will add fewer people for the same work as artificial intelligence improves productivity.
But beyond 2027, the composition of that hiring is moving toward AI-adjacent, high-value roles. Companies that fail to climb that curve risk being left with slower growth in lower-value roles.
BofAS added that it expects headcount growth for India tech to grow in low single digits over the next five years, with the sector benefiting from AI-experimentation programs.
1. The growth window is not closed yet
India’s technology talent pool has expanded at a roughly 5% compound annual growth rate over the past ten years, according to BofAS. The sector is dominated by IT services companies and GCCs, which have widened their participation across technology and engineering operations value chains.
For 2026 and 2027, BofAS says the traditional cost arbitrage argument continues to work in India’s favour. Global corporations will keep moving roles here rather than filling them in the United States, Europe, or elsewhere in Asia-Pacific.
Net office leasing across India’s top seven cities grew 14% year-on-year in 2025 to a new annual high, almost entirely driven by GCCs expanding their physical footprints, per property consultancy JLL data cited by BofAS. The brokerage expects this to continue through 2026 and 2027.
BofAS noted that the trend is expected to persist for the traditional factor of ramping up exposure to India’s talent pool at an attractive value, resulting in hiring for new roles in India versus other regions, shifting existing on-site roles to India, and a higher number of enterprises especially those based in Asia-Pacific setting up their first centre in the country.
2. 65% of global 500 companies have not even arrived yet
BofAS points out that 65% of Global 500 companies have not yet opened a sizeable Global Capability Centre in India, representing an enormous pool of potential new entrants.
The trend is also spreading beyond the traditional American and European corporate base. Asia-Pacific headquartered GCCs in India have grown 51% over the last three years, with Japan leading that charge, according to Cushman and Wakefield data cited by BofAS. Seventy-five Japanese companies have established 121 GCCs across India in the last five to six years.
BofAS also notes that while older and more established GCCs started with a cost focus and are now gradually moving up the value chain, newer mid-market entrants are skipping that phase entirely and using their India centres as deep technology hubs from day one.
3. Two-thirds of GCCs now run innovation teams out of India
Global Capability Centre revenues in India grew at an 11% compound annual growth rate between FY19 and FY25, reaching USD 76 billion, according to NASSCOM and Zinnov data cited by BofAS. Their share of India’s overall technology exports has risen from 30% in FY19 to 33% in FY25.
Engineering Research and Development now accounts for 56% of the overall Global Capability Centre market in India, with Information Technology and Business Process Management making up the remaining 44%, per the same data.
Revenue per headcount at Indian GCCs has been climbing steadily, accelerating from a 2.6% compound annual growth rate between FY15 and FY19 to a 6.4% compound annual growth rate between FY24 and FY25, according to NASSCOM data cited by BofAS.
Driving digital transformation has overtaken cost reduction as the primary stated priority for GCCs, with 61% of enterprises citing it versus 54% for cost reduction, according to Ernst and Young data cited by BofAS.
BofAS said that growth in revenue per headcount for Indian GCCs (GCCs) has accelerated over the years, highlighting that they are moving higher in the value chain.
4. AI is boosting productivity and the hiring math will show it
BofAS expects a 5% annual gap to open up between value growth and headcount growth at Indian IT services companies. Revenues will grow faster than the number of people generating those revenues. Over the past five years, that gap was only about 2% annually.
The top five Indian IT services companies posted headcount compound annual growth of 5% between 2020 and 2025, against revenue compound annual growth of 7% in dollar terms, per company data cited by BofAS. The brokerage expects that delta to widen significantly going forward.
BofAS links this directly to AI adoption among knowledge workers, referencing an Anthropic event at which the American artificial intelligence company categorised 2026 as the year when AI usage among knowledge workers goes mainstream, with tools making strong progress across data, legal, sales, finance, and banking functions.
BofAS said that 2026 is getting categorised as the year of mainstreaming AI usage for knowledge workers, and that just as with IT services, this is expected to increase per-employee productivity over the next few years, resulting in the emergence of a 5% annual gap between growth in value versus headcount.
5. Young workers are bearing the biggest brunt
BofAS cites research from Anthropic showing that the impact of AI on job-finding rates has been disproportionately felt by workers aged 22 to 25 in occupations with high AI exposure. Monthly job-finding rates for this cohort have been trending downward since around 2022, while those in occupations with no AI exposure have held relatively steady, per Current Population Survey data cited by Anthropic and BofAS.
BofAS noted that taking cues from the sub-sector of programming jobs, where trends on employment on account of AI are running a couple of years ahead of other job categories, the impact of AI on hiring prospects has been bigger on young workers versus other categories.
The brokerage adds that accordingly, the focus of GCCs to move up the value chain is likely to become even more important for the next leg of job creation.
6. India does not have enough AI specialists and the gap is widening
Demand for AI and data talent in India is growing at 25% compound annually while supply is growing at only 15%, according to NASSCOM data cited by BofAS. Between 35% and 55% of job openings for AI specialists are currently going unfilled, according to staffing firm Quess data cited by BofAS.
Per talent analytics firm Xpheno, cited by BofAS, only around 4,000 to 5,000 professionals in India can genuinely be classified as true AI specialists. The bulk of India’s current talent sits in the AI user and AI integrator categories people who can apply AI tools to their work or connect AI services to platforms, but who are not building or designing AI systems from scratch, per NASSCOM and Deloitte data cited by BofAS.
India also produces only about 500 AI-related PhDs annually, and roughly 44% of India’s leading AI researchers are based overseas, drawn by better-funded laboratories and clearer career trajectories abroad, according to BofAS.
BofAS said that while India has one of the largest tech services employee pools in the world, supply of AI specialists is currently constrained, and it is equally important for India to see an increase in the number of AI experts and AI builders, not just AI users and integrators.
7. Without action, India’s tech headcount could fall from 75-80 lakh to 60 lakh by 2031
NITI Aayog, the Indian government’s premier policy think tank, conducted a study jointly with NASSCOM and Boston Consulting Group. BofAS incorporated the findings into its analysis.
In a business-as-usual scenario where neither industry nor policymakers respond to AI-driven productivity changes, technology services headcount could fall from 75-80 lakh in 2023 to 60 lakh by 2031. The customer experience sector could shrink from 20-25 lakh to 18 lakh over the same period, per the NITI Aayog study cited by BofAS.
In the proactive scenario, where companies reskill employees and policymakers support new role creation, the talent pool can grow at 3-5% compound annually. That requires India to produce significantly more prompt engineers, AI architects, and AIOps engineers, alongside changes to computer science curricula and corporate training programmes, BofAS said.
NASSCOM estimates, cited by BofAS, that pivoting from an allied technology role to a data sciences role takes between three and eight months, while reaching a reasonable level of AI proficiency takes five to twelve months.
BofAS said that in its base case, it expects headcount growth for India tech to grow in low single digits over the next five years, with the sector benefitting from AI-experimentation programs.
Conclusion
India’s position in the global technology supply chain is not weakening, BofAS concludes. It is being renegotiated upward, with companies expecting more sophisticated output from their India operations even as AI tools reduce the number of people needed for routine delivery.
The firms arriving today are coming for AI, data science, and Engineering Research and Development talent. Software development job postings in the United States have recovered roughly 20% from their May 2025 lows and are not far from 2024 levels, per Indeed data via the Federal Reserve Bank of St. Louis, cited by BofAS.
Whether India can supply the right talent fast enough, BofAS suggests, is the question that will determine the sector’s trajectory from here.