Artificial intelligence is disrupting India’s IT services billing models, raising concerns about export momentum. Fund managers caution that AI-led pricing changes may pressure margins, slow deal flows, and impact the current account. While manufacturing exports and engineering R&D firms show resilience, IT stocks have already seen sharp declines in February.
India’s IT sector, long a global outsourcing powerhouse, is confronting a new challenge: artificial intelligence is rewriting billing models, threatening to slow export growth. Fund managers warn that AI-driven pricing shifts could dent margins, weaken deal flows, and ripple into India’s current account and consumption.
Key highlights
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IT stocks have plunged nearly 21 percent in February 2026, marking one of the steepest declines since the 2008 financial crisis, as investors react to AI-led disruption.
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Fund managers at the PMS-AIF World Crystal Summit caution that AI-driven pricing changes could temper export growth, with knock-on effects for India’s current account balance and domestic consumption.
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Weak deal flows and margin pressures are already visible, raising concerns about the sector’s ability to sustain its traditional growth trajectory.
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Manufacturing exports and engineering R&D firms are emerging as relative bright spots, as their models are less vulnerable to AI-driven billing disruptions.
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The broader digital ecosystem, including jobs and ancillary services, faces uncertainty as automation accelerates and clients demand more cost-efficient solutions.
Conclusion
India’s IT sector stands at a crossroads. While AI promises efficiency and innovation, its impact on billing models could erode the export momentum that has long powered India’s economy. The coming months will test whether IT firms can adapt quickly enough to safeguard margins and sustain global competitiveness.
Sources: Moneycontrol, India Today