India enters the global AI fast lane

According to Stanford University, India rose to third place in the 2024 Global AI Vibrancy Index, behind only the United States and China. The AI Index 2025 Report by Stanford University also highlights India’s fast-scaling AI adoption and talent hub. This marks an important inflection point as it reflects a deeper structural shift in how India is positioned within the AI adoption cycle. 

India is no longer just a supplier of IT services, but an increasingly central participant in the execution and scaling of enterprise AI.  

India’s scale in engineering, data science, and software development remains unmatched outside the US and China, and this human capital is the single largest contributor to its AI vibrancy. As global enterprises move from experimentation to deployment, this depth of talent matters far more than headline innovation alone.

For global firms, India increasingly represents the execution layer of AI adoption: where models are operationalised, processes are automated, and real productivity gains are delivered.

For more than twenty years, India’s IT services industry thrived on labour arbitrage, supplying large workforces through offshore delivery centres to provide cost-efficient maintenance and support for global enterprises. That model created substantial value, but it is now undergoing a fundamental transition.

The next phase of growth is being shaped by higher-value work. Enterprise demand is shifting rapidly toward AI consulting, cloud and data engineering, generative AI integration, product engineering, and automation platforms. This change is being driven by the scale of investment from hyperscalers such as Microsoft, Amazon, and Google, which is forcing clients to rethink their technology stacks. The focus has moved decisively away from cheaper coding toward AI-enabled transformation that improves productivity, automation, and decision-making across core operations.

Importantly, Indian IT firms are moving up the value chain. They are building proprietary AI platforms, orchestration layers, and industry-specific solutions, shifting from pure services to IP-led revenue. 

For investors, this evolution makes AI a compelling structural theme in India, best accessed through active exposure to the firms enabling enterprise AI at scale. 

AI Exposure Through Indian IT Leaders

Infosys:

• Infosys is moving clients from AI pilots to full production deployments, leveraging its global client base and delivery scale to capture AI-linked digital transformation budgets. This positions the company at the monetisation phase of India’s AI cycle rather than the experimentation phase.
• Growing AI services revenue and large AI-oriented deal wins indicate that Infosys is an early-cycle beneficiary of AI adoption, with increasing revenue visibility as global enterprises structurally embed AI into core operations.

HCLTech:

• HCLTech’s strength lies in integrating AI into infrastructure modernisation, engineering, and systems integration. These are areas where enterprises allocate AI budgets first, positioning it at the foundation layer of the AI adoption cycle.
• Early disclosure of AI-linked revenue growth and dedicated AI initiatives highlight HCLTech’s role in capturing structural shifts in how enterprises buy and deploy technology, aligning it closely with India’s evolution as a global AI hub.

Zensar:

• Zensar focuses on mid-market and digital-native clients seeking fast AI deployment, giving it leverage in the acceleration phase of AI adoption that is often underserved by larger IT services firms.
• Zensar’s smaller scale and organisational agility provide outsized upside as AI budgets broaden beyond large enterprises, offering complementary exposure to India’s AI cycle.

India’s ascent as a leading AI ecosystem reflects deep structural strengths and an early position in the commercialisation cycle. 

The opportunity is not without challenges, particularly in translating research into proprietary innovation, but the direction of travel is clear. For investors willing to be selective, active exposure to Indian equities offers a compelling way to participate in AI growth at a formative stage of a multi-year cycle.