The ET GenAI Hackathon 2026 has announced the results of its Idea Submission phase, with the shortlist finalised after evaluating entries from more than 54,000 builders across India. Shortlisted teams now advance to the Prototype Development Phase
The fast-expanding war between the United States, Israel, and Iran has captured global attention largely because it is disrupting oil and gas supplies from the Persian Gulf. Yet another resource is now emerging as far more critical to the survival of the region’s societies. Water
Indian technology stocks have seen an unprecedented rout over the past few weeks over fears of artificial intelligence upending the traditional outsourcing model that powers the country's $300bn (£223bn) back-office industry. The sell-off - part of a global correction in traditional software and
The ruling Bharatiya Janata Party-led National Democratic Alliance (NDA) on Monday managed an easy victory in the biennial polls to five Rajya Sabha seats in Bihar, with its candidates including Chief Minister Nitish Kumar and BJP national president Nitin Nabin
Star Brazilian forward Neymar didn’t receive a call-up to the national team squad for the upcoming friendlies against France and Croatia, although striker Endrick found a spot. With this snub, Neymar’s hopes of playing at the upcoming FIFA World Cup have received a massive blow
Claude plugin threatens Indian IT’s ‘back office of the world’ model
This article was originally published in Rest of World, which covers technology’s impact outside the West.
On February 4, the $300 billion Indian IT sector faced a moment of reckoning.
The country’s benchmark IT stocks index slumped nearly 6%, reacting to Anthropic’s release of its Claude Cowork agentic plugin.
The new plugins are designed to automate precisely the high-volume, repetitive knowledge work that has been the bread and butter of Indian IT: contract reviews, regulatory compliance tracking, and sales forecasting, among other things. The stock sell-off was triggered by fears that clients could now use AI for such tasks instead of outsourcing them to companies in India.
This was the first concrete sign of AI’s long-feared threat to the industry, which makes for 10% of India’s GDP and directly employs 5 million people.
Indian IT firms have been preparing for this eventuality. Still, experts who have observed the industry closely believe many of these companies and their services will soon become obsolete. AI won’t kill the entire sector, they said, but only the companies that innovate and adapt to AI quickly will thrive in the future.
“The math is simple: If a U. company can automate legal contract reviews internally using Claude Cowork or OpenAI Codex, why would they pay for a 50-person team in Bengaluru to do it?” Ishan Talathi, co-founder of Pune-based cloud infrastructure firm CloudPe, told Rest of World. “The Indian IT model is built on man-day billing; we charge for bodies on projects. That model is now facing existential pressure.”
Over the past four decades, India has become the “back office of the world”, recruiting affordable labour in cities like Bengaluru, Hyderabad, and Pune to execute low-end tech-related tasks for clients in North America and Europe. The cost of labour in India can be 60%–80% cheaper than in the West.
Talathi believes up to half of traditional outsourcing work is directly exposed to extinction by AI, with areas like contract reviews, compliance documentation, data processing, routine coding, and testing being the most vulnerable.
The business model shift “forces an overdue evolution from cost arbitrage to genuine innovation, which is healthy, [but] a mismanaged transition could devastate urban economies, real estate, and ancillary services,” Talathi warned.
Typically, IT services companies rely on billable hours – charging clients for the amount of time spent on projects. With a smaller workforce and more AI, “the timelines of engagements will massively shrink further, impacting billing”, Yugal Joshi, partner at global research firm Everest Group, told Rest of World.
In recent years, companies have been trying to insulate their business models. Market leaders Tata Consultancy Services and Infosys have been integrating generative AI and machine learning into their core business processes and offerings.
By mid-2025, India’s top five IT companies had trained more than 250,000 employees on AI.
TCS – the biggest Indian IT firm and the first and only one to publicly disclose this information so far – pegs its annualised AI services revenue at $1.8 billion. That’s around 5% of the company’s quarterly consolidated revenue.
“Large enterprises don’t engage Indian IT firms to run isolated tasks; they outsource complex, interdependent systems with accountability attached,” Nirmit Biswas, senior research analyst at Market Research Future, told Rest of World. “AI tools may shorten delivery cycles, but they don’t replace vendor responsibility for uptime, integration, compliance, or transformation outcomes.”
Biswas estimates only “roughly a fifth of the effort embedded in traditional IT delivery” to be affected by AI. “That does not translate into a similar proportion of revenue at risk,” he said.
As of now, experts said, junior roles that execute repetitive, standardised tasks are most vulnerable. Mid-level jobs with low specialisation could also become redundant in the next decade. Workers who upskill will likely continue to earn good salaries.
“AI should not be viewed as an existential risk to Indian IT, but as a filter,” Biswas said.
Some believe that AI’s threats may push the Indian IT industry into a better direction.
“The scaremongering has some merit, and not every tech services firm will survive,” Joshi said. “The impact will not depend on an industrywide AI impact, but the strategic initiatives each service provider undertakes. Speed to partner with AI vendors, scaling solutions, and internal operating model transformation will be crucial.”
Ananya Bhattacharya is a reporter for Rest of World covering South Asia's tech scene. She is based in Mumbai, India.
This article was originally published in Rest of World, which covers technology’s impact outside the West.
Source: Scroll
Related Posts: How to harness the full power of Claude Claude AI to Prioritize Its Own "Welfare" by Breaking Off Abusive Chats IT And Cybersecurity Stocks To Be Watched As Claude Code Security Rattles US Market Claude AI wipes German founder’s database What is Claude for Healthcare Anthropic confirms Claude AI outage affecting web US used Anthropic's Claude to capture Venezuela's Nicolas Maduro Google engineer says Claude built in 1 hour what it took Google 1 year to do Here is why Anthropic claims to keep Claude ad-free forever Anthropic's Claude Code Security
Former India captain Sunil Gavaskar has said Sunrisers Leeds' signing of Pakistan spinner Abrar Ahmed "indirectly contributes to the deaths of Indian soldiers and civilians". Gavaskar's comments are the most high-profile criticism of Sunrisers' deal for Abrar at last week's Hundred auction
5 hours ago
The US artificial intelligence (AI) firm Anthropic is looking to hire a chemical weapons and high-yield explosives expert to try to prevent "catastrophic misuse" of its software. In other words, it fears that its AI tools might tell someone how to make chemical or radioactive weapons
5 hours ago
If one wants to explore the many debates and controversies surrounding the Congress and its role in shaping India’s political trajectory, there may soon be a new address in the capital to turn to. At 3, Safdarjung Lane, the official residence of Nishikant Dubey — the Bharatiya Janata Party MP
5 hours ago
Chelsea have been handed a Premier League record fine of £10.75m and a suspended transfer ban. It was a result of the club making secret payments to unregistered agents and third-parties over transfers between 2011 and 2018. But it could have been a lot worse
5 hours ago
Kerala Congress (M), BDJS announce names of 12 candidates eachKerala Congress (M) and BDJS announced candidates for the upcoming assembly polls, including KC(M) chairman Jose K Mani from Pala and 12 others from BDJS. Published on: Mar 17, 2026 7:36 AM IST By Vishnu Varma
5 hours ago
Iran’s National Security Chief Ali Larijani on Monday penned a note to Muslim countries, questioning their lack of support for Tehran as the US-Israeli war is now entering its third week with no clear end in sight, disrupting global energy supplies and raising fears of a spike in global inflation
5 hours ago
Nagaon MP Pradyut Bordoloi expressed strong displeasure over Dr. Asif Nazar being considered for the Lahorighat Assembly ticket, citing Nazar's alleged association with an individual charged in an attack on Bordoloi. Bordoloi wrote to AICC General Secretary Jitendra Singh
5 hours ago
A sessions court in Gujarat’s Gir Somnath district on Monday convicted five persons and acquitted 35 others in connection with a 2016 case in which seven Dalits were assaulted in the town of Una, The Indian Express reported. Additional Sessions Judge Jignesh Pandya of the court in Veraval
5 hours ago
It's Hollywood's biggest night. The 98th Academy Awards featured emotional speeches, comical relief and a bevy of backstage fun. But it was perhaps a night to forget for Timothée Chalamet. As well as losing out to Michael B Jordan for best actor and One Battle After Another for best picture
5 hours ago
US President Donald Trump on Monday said more than 30 mine laying ships of Iran have been destroyed which has affected Tehran’s capacity to threaten commercial shipping in the Strait of Hormuz. “We are hammering their capacity to threaten commercial shipping in the Strait of Hormuz with more
5 hours ago
Love Horoscope Today for March 17, 2026: A spontaneous moment could lead to a meaningful connectionLove Horoscope Today, March 17, 2026: Find daily astrological predictions for all sun signs. Published on: Mar 17, 2026 7:28 AM IST By Neeraj Dhankher Share via Copy link Aries: Mars is pushing you to
5 hours ago
Dubai arrests Iranian drone strike survivors after they sent explosion photos to loved ones3 foreigner nationals who survived drone strike in Dubai have been arrested after sending photos of the explosions to family members. Updated on: Mar 16
5 hours ago
‘Firms need to move to adaptive, energy-efficient AI models’Sarah Hooker is convinced that the future lies in AI systems that use less computing power, cost less to run and can adapt to the needs of users. Published on: Mar 17, 2026 6:58 AM IST By Shweta Taneja Share via Copy link In the last
5 hours ago
Baghdad witnessed a significant drone and rocket attack on the U.S. embassy early Tuesday. This incident marks the most intense assault since the commencement of the U.S.-Israel war with Iran. Iraqi security forces have heightened their presence across the capital. The Green Zone
5 hours ago
Russell Wilson trade update: Chiefs hand a shock to Giants QB with Justin Fields move Published on: Mar 17, 2026 5:03 AM IST By Khushi Arora Share via Copy link New York Giants quarterback Russell Wilson (3) waves to fans after the game against the Dallas Cowboys (IMAGN IMAGES via Reuters Connect)
5 hours ago
![London [UK], March 17 (ANI): The Premier League has completed a disciplinary process with Chelsea FC in respect of historical breaches relating to Financial](http://newsorbit360.com/files/news/en/imgs/chelsea-fined-and-faces-supended-transfer-ban-by-premier-league.webp?height=520)
London [UK], March 17 (ANI): The Premier League has completed a disciplinary process with Chelsea FC in respect of historical breaches relating to Financial Reporting and Third Party Investment.In 2022, Chelsea FC’s current owners voluntarily reported to the League that they had evidence of
5 hours ago
A Bengaluru-based cafe has drawn attention on social media after adding a 5 per cent “Gas Crisis Charge" to a customer’s lemonade order, sparking debate on social media platform X. The unusual fee, applied on a bill for two mint lemonades, has left many users amused and some questioning its
5 hours ago
Editorial independence is core to our work. Some links may earn us a commission, without influencing our opinions.Still using an older laptop? These Intel 13th Gen laptops show what modern performance feels likeIntel 13th Gen laptops bring improved performance
5 hours ago
US President Donald Trump said on Monday that he is planning to delay a high stakes visit to China later in March by about a month because of the Iran war. "We've requested that we delay it a month or so," he told reporters at the White House
5 hours ago
LDF ally ISJD, UDF ally RSP name candidates for four seats eachThe ISJD and RSP announced their candidates for Kerala Assembly polls, with ISJD's K Krishnankutty retiring from politics and RSP seeking assembly representation. Published on: Mar 17, 2026 7:30 AM IST By Vishnu Varma
5 hours ago
Horoscope Today, March 17, 2026: Operational strategies at work need refinementHoroscope Today: Read the astrological predictions for each zodiac sign based on an expert's guidance on March 17, 2026. Published on: Mar 17, 2026 7:19 AM IST By Dr Prem Kumar Sharma
5 hours ago
The report from Elara Capital said retail gasoline and diesel prices “could be fully protected through excise cuts until roughly $110/bbl, beyond which price hikes on diesel and gasoline would become inevitable”. Also Read :Fino Payments Bank Shares Fall To 52-Week Low Amid Probe Reports;
5 hours ago
Punjab Assembly session: House passes motion against LoP Bajwa over ‘band player’ remarkThe Punjab assembly condemned opposition leader Partap Singh Bajwa for alleged derogatory remarks about a minister, leading to chaos and a walkout by Congress. Published on: Mar 17
5 hours ago
More than a thousand citizens in Ladakh's Leh and Kargil regions rallied on Monday, echoing calls for statehood and adherence to the Sixth Schedule. Leaders from the Apex Body Leh alongside the Kargil Democratic Alliance expressed their discontent regarding the central government's stance
5 hours ago
Menstrual pain is often dismissed as an inevitable part of being a woman. But when cramps become debilitating, interfere with daily life or are accompanied by chronic pelvic discomfort, they may signal something more serious. One such condition is endometriosis – a long-term disorder affecting
5 hours ago
Khushbu Sundar comes out in support of Trisha amid her viral pics with Vijay: ‘She is one of the most dignified women’Khushbu Sundar has addressed the online chatter surrounding the public appearance of Vijay and Trisha Krishnan, after the divorce petition filed by Sangeeta. Mar 17, 2026
5 hours ago
Rex Culpepper's fiancee pays sweet tribute after tragic bike accident death: ‘I don’t regret' Published on: Mar 17, 2026 4:55 AM IST By Yash Nitish Bajaj Share via Copy link Former Syracuse quarterback Rex Culpepper died after an accident on Saturday (Instagram/Rex Culpepper) Rex Culpepper
5 hours ago
