AI is emerging as the catalyst that could shift India from a services‑led growth model to a full‑spectrum innovation economy over the coming decade, according to India Avenue Investment Management.
AI is emerging as the catalyst that could shift India from a services‑led growth model to a full‑spectrum innovation economy over the coming decade, according to India Avenue Investment Management.
In February, it was revealed the nation’s largest manufacturers are partnering with global technology leaders NVIDIA, Siemens, Cadence, and Synopsys to build AI-powered, software-defined factories.
Backed by a US$134 billion investment across automotive, renewable energy, robotics, and construction, these collaborations are bringing cutting-edge AI infrastructure, digital twins, and NVIDIA Omniverse and CUDA-X libraries into the heart of manufacturing – accelerating design, operations, and innovation on an unprecedented scale.
India Avenue Investment Management co-founder and CIO Mugunthan Siva told Investor Daily the AI opportunity defines the next decade of Indian tech—and is not just a cyclical refresh.
“India’s major IT services firms building enterprise AI platforms on NVIDIA’s stack reflects a fundamental rewiring of the global technology services model, driven by agentic and generative AI.”
According to a Nasscom + McKinsey 2025 report, AI, especially agentic AI, will unlock US$300-500 billion in new opportunities for India’s tech services sector by 2030.
“This includes productivity gains, new delivery models, AI‑native service lines, and hybrid human-AI teams. This growth range closely tracks India’s overall tech‑industry expansion, which is projected to reach US$500 billion by 2030,” Siva said.
Siva said if agentic and generative AI alone are expected to unlock US$300-500 billion then AI is not just a contributor, but is the dominant growth engine driving India’s doubling.
“The same report notes that agentic AI will permanently reshape delivery by moving India from labor‑led to AI‑augmented hybrid teams, which redefine pricing, productivity and operating models. This doesn’t appear to be a cyclical capex wave but more a transformation of the core business model,” he said.
India‑based GCCs are expected to become global engineering and AI centres, leading end‑to-end enterprise transformation and product development. “This upgrades India’s position in the global tech stack from ‘delivery partner’ to ‘innovation centre’.”
“Demand for data and AI is projected to grow at 12-15 per cent annually, even as legacy service lines shrink. This seems to be a long‑duration shift in enterprise spending patterns.”
Siva said Indian IT services firms integrating deeply with Nvidia’s AI stack signals long-term platform standardisation, investments in reusable AI assets and creation of proprietary enterprise AI platforms.
“With 5-6 million tech workers and the world’s largest concentration of data‑rich enterprises building AI at scale, India becomes the global centre for AI‑powered transformation. No other geography has this combination of talent, digital infrastructure, and enterprise demand.”
AI adoption in India is poised to transform multiple sectors well beyond traditional IT services, according to Siva, with banking, healthcare and manufacturing representing the next wave of India’s AI‑enabled productivity surge.
“Industry reports show enterprise spending on data and AI is expected to grow 12-15 per cent annually, even as legacy IT spend slows, with hybrid human-AI teams reshaping delivery and operational models. This positions banks – already among India’s most technology‑intensive institutions – to benefit disproportionately as AI enhances credit underwriting, fraud detection, personalisation and compliance,” he said.
Meanwhile, healthcare stands to gain through agentic AI’s ability to automate diagnostics, triage, and clinical workflows.
“India’s healthcare sector is in the midst of digitisation, and AI’s rise is described as a ‘once‑in‑a‑generation’ opportunity for productivity and innovation. AI‑driven operational efficiency is especially impactful in India’s capacity‑constrained health system.”
In manufacturing, he said AI will accelerate India’s ambitions in advanced production, supply‑chain optimisation and predictive maintenance.
“As Global Capability Centres in India evolve into global engineering and AI innovation hubs, manufacturing enterprises increasingly rely on India‑based AI talent to modernise operations.”
Siva said while India’s large‑cap IT services firms remain the most visible beneficiaries of the AI wave, the opportunity is far from concentrated and the rise of AI infrastructure in India is broadening the investment opportunity far beyond traditional IT services.
“The AI opportunity in India spans the entire market cap spectrum. Large caps provide scale and resilience, but mid‑caps and emerging platform players offer higher growth optionality as India becomes a core global market for enterprise AI transformation,” he told InvestorDaily.
“As AI becomes a US$300-500 billion value driver for India’s tech sector by 2030, the capital cycle supporting this shift is spreading into adjacent sectors that Australian investors should increasingly consider.”
With AI expected to unlock up to half a trillion USD in new value for India’s tech sector by 2030, driven by agentic AI and hybrid human-AI delivery models, Siva said that scale of disruption naturally extends well beyond the top names.
“Large caps such as TCS, Infosys, HCL Technologies and Wipro benefit from their global client bases and early partnerships around AI platforms, but mid‑cap IT and digital engineering firms are often better positioned for faster earnings leverage such as Coforge, Persistent Systems and Zensar Technologies.”
He said as enterprise AI spending grows 12-15 per cent annually and legacy services shrink, mid‑caps with niche AI capabilities, product engineering strength, or vertical specialisation can scale rapidly as clients shift budget into AI‑native work.
“At the same time, platform companies and India’s 1,600+ Global Capability Centres are emerging as global AI innovation hubs, not just service extensions, thanks to India’s talent concentration and accelerating enterprise adoption.”
Nvidia has strengthened its commitment to India by partnering with local VCs to support over 4,000 Indian AI startups, gaining access to GPU infrastructure and technical expertise to accelerate development.
“India’s emerging AI startup ecosystem is becoming increasingly investable.
He said India’s start-up ecosystem also benefits from the rapid evolution of Global Capability Centres, which are becoming global innovation hubs and significant early adopters of AI products built in India.
“This provides local AI startups with something every early‑stage ecosystem needs: proximity to large customers.”
Meanwhile, adoption is accelerating across Indian enterprises, 47 per cent already run multiple GenAI use cases, and nearly half have moved pilots into production, according to EY. This signals a domestic market ready to scale AI solutions rather than simply exporting talent.
“India’s AI startup ecosystem is investable, scalable, and supported by strong structural demand, with the next decade offering substantial upside as AI adoption deepens across sectors.”
