Nasscom projects $300 billion tech boom by FY26 despite global headwinds

Indian technology industry body Nasscom expects industry revenue to reach $300 billion in FY26 despite several headwinds such as policy uncertainty and a slow recovery of discretionary spending.

According to the annual strategic review report, tech companies added $13.8 billion in incremental revenues to reach $282.6 billion (including hardware).

While overall revenue grew 5.1% year-on-year, domestic revenues outpaced export revenues. In FY25E, exports touched $224.4 billion, a 4.6% year-on-year growth from $214.4 billion in FY24. Domestic revenues reached $58.2 billion in FY25E, a 7% growth from $54.4 billion in FY24. Currently, MNCs and Indian-headquartered tech companies contribute equally (50:50) to overall tech revenues in India.

Speaking to Fortune India, Sindhu Gangadharan, Chairperson of Nasscom, said that despite increased headwinds due to geopolitical uncertainties, India stands out for its ability to collaborate with other nations. Specifically, with respect to AI, as Europe and the US lean heavily on regulation, frameworks, and innovation, “We have the right balance of focusing on innovation while also ensuring we build in the right way, not over-indexing on either. It's playing to our advantage; we just need to stay focused on the target.”

The sectoral breakdown in the report highlights that the Engineering R&D segment grew the fastest in the current fiscal at 7%, followed by software products and hardware at 5.9% and 5.8%, respectively, contributing a combined revenue of $90.9 billion. The IT services sector is also seeing a recovery, albeit slower, at 4.3%, contributing $137.1 billion in FY25 compared to 2% growth in the last fiscal year.

The industry also doubled its net hiring, adding 126,000 people this year compared to 60,000 last year. An estimated 5.8 million people are currently employed by tech companies in India. While geopolitical tensions remain a major headwind, Nasscom foresees higher economic growth fuelled by the US, with core sectors such as hi-tech, BFSI, manufacturing, trade, transport, and logistics on a positive trajectory. Increased tech spending on services and the AI shift are expected to further boost the industry.

Rajesh Nambiar, President of Nasscom, emphasised the importance of skills as a critical growth driver. “While the CEO outlook for FY2026 remains measured yet positive, with increased tech and AI spending, sustaining growth momentum requires a strategic vision. Upskilling in niche and core tech areas will continue to be of paramount importance for the industry,” he said.