BENGALURU: The Reserve Bank of India said demand for digital solutions and IT services remains supportive of economic activity and that services exports continue to hold up despite growing concerns over the impact of artificial intelligence on the technology sector.
In its June monetary policy statement, the RBI said India's services sector remained resilient, with demand for freight, digital solutions, e-commerce, entertainment and IT supporting activity.
The central bank also said services exports were expected to sustain momentum as demand for Indian services remained healthy despite concerns related to AI.
"Services exports are also holding up well, reflecting sustained demand despite concerns about AI," the RBI said in the Governor's statement.
The comments come at a time when investors and analysts are sharply divided over how artificial intelligence will affect India's $300-billion-plus technology services industry.
The remarks come amid growing debate over whether AI will create new demand for Indian technology companies or reduce spending on traditional outsourcing and software services.
Analysts at Ambit Capital said earnings trends continued to point to structural challenges for the sector.
BofA Securities said enterprise adoption of AI remains at an early stage and is likely to create broader opportunities for Indian IT services companies over time. The brokerage said concerns about pricing pressure and job displacement need to be weighed against the potential for new technology spending as AI deployment expands.
CLSA has also pushed back against the view that AI is already leading to widespread job losses in the sector. The brokerage said hiring data and continued recruitment by large technology companies do not support claims of significant AI-led displacement, although demand is shifting towards specialised AI skills.
The industry's near-term outlook remains subdued. Infosys has forecast constant-currency revenue growth of 1.5% to 3.5% for fiscal 2027, while analysts continue to cite cautious client spending and uncertainty in key overseas markets.
Gartner expects global tech spending to rise 13.5% in 2026 to $6.31 trillion, up from about $5.56 trillion in 2025. Further, IT services spending is expected to increase 9.4% year-on-year to $1.87 trillion in 2026. Gartner said the surge in AI adoption and supporting infrastructure is driving the overall increase in technology spending.