HSBC report highlights India’s services sector ascending the value chain

“However, AI is going to create some amount of challenge, or there will be a kind of productivity growth on the back of which profitability will come off for some of the companies providing IT services. But at the same time, it also opens new avenues, at least in the short run. For example, using generative AI, more for the BFSI sector, and so on. So in a way, our IT services sector will just have to be adaptive and nimble when new opportunities are arising and will have to move there to overcome the opportunities that are going to get lost,” added Bhandari.

While India's services sector has made significant strides, it faces a formidable challenge in the form of AI. Bhandari's observations shed light on the disruptive potential of AI, which can automate tasks and processes previously performed by human workers. As AI technologies continue to evolve, there is a growing concern that certain roles within the services sector may become redundant or require reskilling to remain relevant.

To address the challenge posed by AI, the IT services sector in India must embrace adaptability and nimbleness. Traditional IT service providers must be proactive in identifying areas where AI can augment their offerings rather than replace them entirely. By actively incorporating AI capabilities into their operations, companies can enhance their efficiency, deliver more value to clients, and tap into new opportunities arising from this disruptive technology.