AI-Driven Transformation in the Indian IT Services Sector: A Comparative Study of Pre- and Post-COVID-19 Eras

This study examines the AI-driven structural transformation of the Indian Information Technology (IT) services sector through a comparative analysis of the pre-COVID-19 era (up to FY 2019–20) and the post-COVID-19 era (FY 2020–21 to FY 2024–25). India’s IT-BPM sector, which expanded from US$ 118 billion in FY2015 to an estimated US$ 283 billion in FY2025 -with exports contributing US$ 224 billion -represents one of the world’s most strategically significant technology services ecosystems. The central inquiry of this research is concerned with how the COVID-19 pandemic functioned not merely as a disruption but as a decisive structural inflection point that compressed and accelerated an AI transformation which, in the pre-pandemic period, had been advancing incrementally. Prior to the pandemic, AI adoption in Indian IT was characterised by pilot-stage experimentation, narrow deployment of Robotic Process Automation (RPA) and basic machine learning within BPO and analytics sub-sectors, and limited strategic alignment -with fewer than 15% of Indian enterprises having embedded AI into their broader corporate strategy. Despite India scoring 3.09 times the global average in AI skills penetration between 2015 and 2021, the sector’s competitive advantage remained rooted in the labour arbitrage model, and AI remained an “adjacent” capability rather than a core architectural principle. Existing literature, while rich in studies of digital transformation (Vial, 2019; Soto-Acosta, 2020) and the structural evolution of Indian IT (Arora & Gambardella, 2004; Dossani & Kenney, 2007), has not produced a consolidated, comparative, secondary-data-driven examination of AI-driven transformation across the pre- and post-COVID eras in the Indian IT services context. This study addresses that gap. The study employs a descriptive and exploratory research design grounded in a qualitative-dominant, secondary data methodology. Drawing on NASSCOM Strategic Reviews (2021–2025),