Indian IT Sector Anticipates Revitalization in 2025 with Improved Macroeconomic Factors

Published On: May 19, 2025

Indian IT Sector 2025: Growth Outlook & Key Sector Trends

India’s IT industry is set for recovery in 2025 with the revival of global technology opportunities, emerging demand, and improved macroeconomic conditions. After a couple of years of stagnated growth, analysts expect industry revenue growth of 4% to 6% for FY26, with overall revenues crossing $282 billion by FY25.

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Factors Contributing to Growth and the Sector’s Forecast

The easing of global constraints, continuous cuts in interest rates by the US Federal Reserve, and an overall friendly business atmosphere in developed markets have improved enterprise confidence—a stark increase in spending on technology, software, and IT services is visible.

India’s IT Exports and Share in the Global Outsourcing Market in 2024-25 are forecasted to reach $210 Billion, capturing an 18 percent market share. With a recovering US market and growing adoption of innovations such as Artificial Intelligence (AI), Generative AI, and cloud services, the sector’s growth is further expected to accelerate in FY26 with a boosted 6% to 7% growth.

Hiring and Skills Demand

The outlook for IT hiring is set to change. After a period of stagnation, leading IT firms are set to hire over 150,000 new graduates in FY25, with total employment opportunities in the region expected to grow by about 15–20%. There is a strong need for job positions related to AI, machine learning, data analytics, Python, and cybersecurity due to the ever-evolving nature of the industry.

Sectoral Momentum

Other sectors that prominently use these technologies, such as banking, financial services, insurance (BFSI), healthcare, and retail, have been some of the early adopters of AI-powered solutions, creating new demand for IT companies. These technologies are further propelling the growth of the sectors through investments in digital transformation and automation.

Risks and Challenges

Looking forward, competitive global centres, increasing global ambiguity, such as US tariffs and policy changes, a weaker outlook for Europe, slower deal cycles, and competition from global capability centres could pose risks to industry leaders.

Macroeconomic headwinds are expected to ease, paving the way for increased IT spending, which makes an optimistic case for India’s IT sector to bounce back by 2025. Regardless of market risks and changing global dynamics, nurturing global challenges and focusing on upskilling, digital transformation, and emerging technologies will ensure continued growth.

Read: Indian Stock Market Likely to Open Flat, Global Markets, and Quarterly Earnings appear to Be Triggering Caution.

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