India’s IT titans trade the stopwatch for the silicon brain
The ‘labour arbitrage’ model that built Bengaluru is being
dismantled as the country’s tech giants bet on outcome-based pricing and
‘sovereign’ AI.
R Kannan
For three decades, the arithmetic
of the Indian IT sector was as reliable as the monsoon: hire more graduates,
bill more hours, and watch the margins grow. But as the industry gathers this
week for its annual strategic retreat, the conversation has shifted from
headcount to "agentic orchestration."
The traditional "stopwatch" model of
billing—charging global clients for the time of an engineer—is being
cannibalized by the very technology these firms sell. In its place, a new multi-pronged
strategy is emerging, one that seeks to turn India from the world’s back office
into its primary engine of autonomous intelligence.
The end of the hour
"Writing code is no longer the central goal," says
Nandan Nilekani, chairman of Infosys. "Making AI work at a
root-and-branch level is the new priority." His sentiment is echoed across
the sector. TCS, the crown jewel of the Tata empire, recently reported
an AI-related revenue run-rate of $1.8bn, signalling that the experimental
phase of generative AI has passed into a hard-nosed commercial reality.
To survive a world where AI can write software 50 per cent
faster than a human junior, firms are pivoting to outcome-based pricing.
Instead of billing for 1,000 hours of manual testing, companies like Wipro
and HCLTech are now signing contracts tied to specific business
results—reducing a bank’s claims-processing time or increasing a retailer’s
sales conversion.
Agents of change
The most radical shift is the rise of agentic services.
Indian firms are no longer just providing "support"; they are selling
"digital coworkers." These are not simple chatbots but multi-agent
systems that manage complex workflows in procurement, legal, and HR without
human intervention.
HCLTech has taken this a step further into the physical realm. Its
"VisionX" platform now manages autonomous cranes at global smart
ports, a move that analysts say broadens the sector’s addressable market into
"Physical AI" and robotics.
The reskilling mandate
This transition has necessitated a brutal overhaul of the
workforce. The "pyramid" structure—thousands of juniors managed by a
few seniors—has been flattened into hybrid pods. These elite units
consist of a few architects overseeing a fleet of AI agents.
The scale of reskilling is unprecedented. TCS has moved
nearly 350,000 employees through its AI-awareness programmes, while Wipro’s
$1bn "ai360" initiative has effectively re-engineered its entire
talent pool. New roles, such as "AI Forensic Analysts" and
"Model Ethicists," are replacing the generalist coder.
Sovereign ambitions
Despite the optimism, risks remain. As global data
regulations tighten, Indian firms are investing in Sovereign AI Hosting.
By building domestic, AI-ready data centres, they hope to attract highly
regulated sectors like European banking and American healthcare, which are wary
of hosting sensitive data on global public clouds.
"India is a nation of AI optimists," says N. Chandrasekaran,
chairman of Tata Sons. The sector’s hope is that by moving "up the
stack" into chip design and industry-specific small language models, they
can decouple their growth from the number of seats they fill in a Bangalore
office. In the age of the algorithm, the stopwatch is finally being put away.
