Our tech trends report, with the theme, 'Growing responsibly, together,' explores key trends, challenges, and opportunities for Indian and global technology players in 2025. The report highlights the importance of focusing on responsible growth by balancing innovation with trust, compliance, and sustainable stakeholder value creation.

Key growth drivers in Tech industry

  • The tech industry employed 5.43 million professionals in FY24, with a 1% growth over FY23.

  • There is high demand for digital skills like AI, data science, IoT, cloud computing, blockchain, and AR/VR, with a 2 million+ digitally skilled talent pool.

  • Government initiatives, such as PM Kaushal Vikas Yojana 4.0, FutureSkills Prime, and PMGDisha, are addressing the skill gap.

  • The industry remains a net hirer, driving employment and economic growth.
  • Digital engineering saw a 7.4% year-on-year growth in FY24.

  • Growth in aerospace, defence, and automotive sectors has boosted investments in heavy engineering and ER&D.

  • The industry is embracing new technologies like SpaceTech, digital twins, AI automation, and large language models (LLMs) for fraud detection, automotive simulation, and more.
  • India is the third-largest tech start-up ecosystem, with 31,000+ start-ups as of 2023.

  • There are 3,600 DeepTech start-ups, showing continued growth despite challenges.

  • With 1,700 GCCs in India as of FY24, global capability centres are evolving into hubs for innovation and transformation.

Trends and perspectives

  • India’s role as a global tech powerhouse: With USD 254 billion in revenue and a talent pool of 5.43 million professionals, India remains a leader in technology services. Despite challenges from macroeconomic uncertainty and reduced tech spending, the growth outlook for the sector remains moderate, driven by expanding Global Capability Centres (GCCs), a thriving start-up ecosystem, and strategic focus on emerging technologies.

  • Emerging opportunities in electronics and semiconductors: India’s push for self-reliance in the electronics manufacturing and semiconductors sectors is gaining momentum with government-backed initiatives like the Production-Linked Incentive (PLI) scheme. The country is attracting substantial foreign investments, with notable announcements from Micron, Foxconn, CG Power (partnering with Renesas Electronics), and Stars Microelectronics.

  • Pressure on earnings and emphasis on cost optimisation: In FY24, Indian tech firms faced significant revenue growth challenges and increased employee costs, leading to a strong focus on profitability. Cost optimisation strategies, including controlled hiring, moderate salary increments, and productivity enhancements became critical for maintaining margins while balancing long-term investments in emerging technologies like Gen AI.

  • Tech talent upskilling is the need of the hour: The rise of Gen AI, cloud computing, and cybersecurity highlights a growing demand-supply gap in digital skills. Reskilling, tapping talent in tier-2 and tier-3 cities, and strengthening industry-academia ties are vital to maintaining India’s global tech leadership.

  • Gen AI: Reimagining business delivery models, innovation and productivity: Generative AI is revolutionising business delivery by enhancing operational efficiency, driving innovation, and creating new revenue streams. However, organisations must invest in responsible AI strategies, ensuring data privacy, effective model training, and integrating Gen AI with customer-centric solutions to unlock its full potential in a secure manner.
  • DeepTech focus: India’s DeepTech ecosystem is burgeoning, with significant growth in space tech, health tech, and AI-driven solutions. However, challenges like infrastructure gaps and funding require long-term capital, robust intellectual property frameworks, and collaborative initiatives between government, investors, and academia to sustain innovation and scale globally.

  • Rising cybersecurity risks: As organisations adopt cloud, AI, and remote work models, cybersecurity threats have escalated. Businesses need to adopt comprehensive strategies, including Zero Trust Architecture, AI-powered threat detection, and compliance with regulations like the Digital Personal Data Protection Act, to safeguard sensitive data and maintain digital trust.

  • Balancing innovation and regulations: The Indian regulatory landscape supports tech innovation while addressing risks related to AI, data privacy, and cybersecurity. Policies like the Digital Personal Data Protection Act and the draft National DeepTech Start-up Policy aim to balance growth with ethical considerations, fostering a secure yet competitive environment for tech advancements.

  • Tech deals slowed down in 2024, IPO opportunity big: M&A and PE activities in the tech sector declined in 2024 due to valuation pressures. However, the booming IPO market provides a significant opportunity for tech unicorns and start-ups to raise capital, positioning them for growth in emerging areas like SaaS, Gen AI, and cloud solutions.

Global view

Global tech firms are balancing heavy AI investments and profitability pressures. A shift from ‘growth at all costs’ to strategic, measured expansion marks this transformation, with AI emerging as a core driver of operational efficiency and value creation.

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testimonial client avatar
The technology industry this year has been dominated by AI, who’s making it, who’s benefitting from using it, who’s industry will be disrupted by it. Boards everywhere are developing their AI strategies to ensure they leverage existing and upcoming AI capabilities and technology at the right time in the most applicable way to drive the growth of their business. Most recognise that the technology has the potential to provide significant automation and data-related opportunities across their business, ranging from customer acquisition to productivity saving. Many tech firms today have developed their strategies and are now moving into implementation; those with a clear plan starting to implement effectively have the potential to disrupt their competitors as the technology and its potential takes shape.
Nick Watson Global Head – Technology Industry, Partner Grant Thornton UK

Navigating the future

India is expected to continue to dominate the global technology services market driven by the availability of massive tech, engineering talent as well as high-quality business and digital transformation impact on global clients. At Grant Thornton Bharat, we believe the following focus areas will define the path forward for industry leaders:

  • Innovation-centric cultures: Building high-performance cultures rooted in innovation and customer-centric excellence is key to long-term success.

  • AI strategy alignment: Companies must craft sharp Generative AI strategies, emphasising talent development, capability building, and operational use cases for measurable outcomes.

  • Responsible growth: Responsible growth demands a balance between profitability and sustainability, with particular attention to AI ethics, cybersecurity, and compliance.

  • Embracing global opportunities: Expanding global capability centers (GCCs) that leverage India’s talent pool will unlock competitive advantages for the industry.
  • Strategic cost optimisation: Profitability must remain a priority, with an emphasis on cost efficiency and scaling investments in Gen AI, cloud, and other emerging technologies.

  • Collaborative ecosystems: Partnerships between academia, government, and industry will be essential for addressing talent gaps and fostering innovation, especially in DeepTech.

  • Focus on IPOs and M&A: Capitalising on IPO opportunities and strategic acquisitions will ensure sustained growth and investor confidence.

  • Digital trust and data security: Strengthening digital trust through robust governance and proactive measures to deal with cybersecurity challenges is critical for safeguarding stakeholder interests.
testimonial client avatar
Tech firms must transition from a people-led services model to a continuous Gen AI and tech-driven approach, leveraging high-skill talent to deliver business value to their clients. To maintain their competitive edge with global clients, value creation should be at the core of their strategy, ensuring a significant impact on client outcomes.
Raja Lahiri Partner and Technology Industry Leader, Grant Thornton Bharat
testimonial client avatar
GCCs offer Indian tech players significant opportunities to collaborate as strategic partners. By leveraging India’s digital capabilities, tech firms can provide specialised solutions like platform development, automation, and advanced analytics. The convergence of India’s startup ecosystem with GCCs enables co-innovation, scaling solutions globally while addressing complex challenges.
Jaspreet Singh Partner - Cyber, Grant Thornton Bharat

Conclusion

As the tech industry evolves, the need for responsible and inclusive growth has never been greater. By focusing on innovation, trust, and adaptability, players in the Indian technology industry can harness transformative technologies to shape a sustainable future. The report’s theme – 'Growing responsibly, together' - serves as a guiding compass for leaders navigating this dynamic landscape.

Our leaders

Raja Lahiri
Raja Lahiri
Partner and Technology Industry Leader
Mumbai
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