India’s IT ecosystem must find its WITCH for the AI age

Tech is tri-polar. US is driving the most investments and patents, China is driving ‘China-for-China’ and India is the tech centre for the rest of the world | Photo Credit: iStockphoto

Indian companies must identify new champions for cloud, semiconductors and deeptech verticals in the tech ecosystem to continue their pace in the AI race, experts told businessline during the Nasscom Technology Leaders Forum (NTLF).

Domestic tech giants such as Wipro, Infosys, Tata Consultancy Services (TCS), Cognizant, HCL Technologies — known by the acronym WITCH — have led the tech sector in India, but as the world enters the AI age, analysts feel that the ecosystem needs to come up with new trailblazers beyond the services sector.

In its recent report, BCG outlined segments like semiconductors, data centres and hyperscalers as the next ‘big bets’ which offer high market attractiveness, although India’s “Right to Win” in these categories is limited today. It suggested that India Tech must place targeted bets to invest in the future while accelerating services, GCCs, BPO and ER&D segments and building adjacencies like an India stack.

“I would urge all of us to think beyond services. Not to say services is not important but the question is where are the next WITCH companies coming from? What is going to be the WITCH of semiconductors or data centres or deep tech? That is absent. I’m assuming the WITCH leaders and all corresponding companies will also think about this,” said Rajiv Gupta, Managing Director and Senior Partner at BCG, while listing Zoho as a possible contender.

To Gupta’s point, leaders like TCS CEO K Krithivasan, also talked about new revenue streams or opportunities that “are not being explored properly.” He encouraged employees to leverage AI for solutions even if it leads to cannibalisation of revenues to prepare for the AI transformation and answer larger questions of potential new services and business models evolving in the sector.

“What can you do with this technology to your customers? How will your business transform because of this technology? What will be the new services that you will be able to introduce? Those are the more important questions,” said Krithivasan.

The pivot is all the more significant considering analysts firms like PL Capital and McKinsey anticipated price contractions for IT services going forward. In a report, PL Capital said IT services will see a volatile intermittent period with uncertainty on growth and margins. Pallav Jain, Senior Partner at McKinsey, said these contractions can be mitigated by expansion into new services.

“Players who are more commercially savvy understand that there will be pressure on existing services but they are investing with clients into new innovation areas so that they can expand their share of the market,” he said.

Regarding the recent IT stocks dip, Jain said the trend was to some extent a knee jerk reaction to macro developments . However, he still anticipated clear winners and losers with a consolidation trend in services. Meanwhile, Gupta said India still ranks among the top three tech leaders of the world by a distance.

“Tech is tri-polar. US is driving the most investments and patents, China is driving ‘China-for-China’ and India is the tech centre for the rest of the world. The strength for India has been the number of engineers and now the experience as the tech capital of the rest of the world for three decades. There are several weaknesses: the quality of the talent tails off very quickly. IP and innovation, patents quality is negligible. The quality of hyper-specialisation, which includes masters, PhDs, etc., is very low, but we have a good starting point, backed by talent and enterprise and a price point,” said Gupta.

Published on February 26, 2026