Can India’s IT services companies exploit their AI opportunity? We’ll know by how they fare in 2026

People are calling this shift ‘The Great Integration,’ and it’s already taking shape. It’s not about creating new AI models, but about using the ones we already have to make real work faster, smarter and more efficient. And for Indian IT service firms, this new phase could be a huge opportunity—if they can rise to the challenge.

There are three main types of AI that will become common in workplaces. Generative AI helps create content, such as writing emails, reports or code. Predictive AI looks at data to forecast things like sales trends, inventory needs or customer behaviour. Agentic AI is a newer kind that can take a goal, like scheduling a meeting or ordering supplies, and carry out the steps to make it happen without a human guiding every move.

Each of these will start showing up in the software tools that employees use every day, helping them save time, reduce errors and make better decisions.

To make all this work, businesses will need to connect these AI tools with their existing systems. That’s where services come in. Setting up AI isn’t just about plugging in a chatbot. It involves linking AI to a company’s databases, making sure it understands business rules, keeping it secure and checking that it gives reliable results. This is complex, behind-the-scenes work—and it’s exactly what Indian IT services firms have been doing for years.

These firms have long experience tailoring technology to suit the unique ways different companies operate. They’ve managed large, complicated tech systems for global clients across industries. Now, as those clients try to induct AI into every part of their operations, they’re turning to the same IT partners for help. Whether it’s automating HR processes, upgrading supply chains or adding AI to customer service tools, Indian IT firms are in the decision-making room.

But while the opportunity is real, so are the challenges. Many Indian IT firms are big and successful, but that can make it hard for them to move quickly. AI is evolving fast and clients want more than just help using new tools. They want a real transformation: new ways of working, smarter operations and better outcomes. To deliver that, IT firms need more than just technical skills. They need people who understand the client’s industry and can design solutions that actually solve problems.

There’s also a chance for Indian IT firms to grow beyond offering services. With AI, they could create their own products or tools that can be reused across different clients. Some have started building these platforms, but turning them into business success will take new thinking, long-term investment and the ability to market and scale like a product rather than services company.

Competition is heating up. Global consulting firms are expanding their AI offerings. Big cloud companies are adding AI features to their platforms and offering support directly to clients. Startups with small teams but strong AI expertise are building niche solutions that are winning business. Indian IT firms won’t just be competing on price or scale anymore. They’ll have to show that they can lead in an AI-powered world.

These firms do have strong foundations. They know how to deliver large projects across time zones and wait through 14-month request-for-proposal cycles. They have long-term client relationships and are trusted to keep systems running smoothly. While others talk about the future, Indian IT firms are used to quietly building it. They know how to take a complicated plan and turn it into working software that runs reliably.

In 2026, success will require them to go beyond just offering AI features. They must become experts in helping clients deploy AI across all operations. That means learning more about each industry, building reusable tools and partnering with startups or research labs. It would also mean hiring and training the right kind of talent.

It won’t be easy. Indian IT firms are good at structured, well-defined work. But AI projects often start with uncertainty. The answers aren’t always clear and the path to success might involve testing, failing and adjusting quickly. That’s a big cultural shift. These firms will need to experiment more, take smart risks and focus on results instead of just effort.

They’ll also have to be honest with themselves. Just renaming an automation team as an ‘AI Centre of Excellence’ won’t fool anyone. Clients want capability, not rebranding. They’re looking for partners who can think creatively, act quickly and take ownership of outcomes.

Still, if any group is equipped to take on the Great Integration, it’s probably the people who once managed to upgrade a 30-year-old billing system written in Cobol without crashing the company’s entire network. They may not always be flashy, but they’re dependable, skilled and now at the starting line of one of the biggest technology shifts we have seen lately.

In 2026, AI will stop being something extra and become essential. The companies that know how to weave it into the way businesses really work—the messy, complex and often illogical systems that run the world— will be the ones that come out ahead. Indian IT service firms have a shot at leading that change if they’re willing to evolve, invest and step out of their comfort zones.

The author is co-founder of Siana Capital, a venture fund manager.