JPMorgan says GenAI and geopolitics will weigh on India’s IT growth

The JPMorgan note captures a structural tension at the heart of GenAI: the same automation that thrills investors also erodes the revenue base of traditional IT service providers. India’s export‑oriented IT firms built their business on headcount‑driven projects; if GenAI lets clients do more with fewer engineers, the old model stagnates even as the underlying technology becomes more capable. In that sense, the “AI deflation” the bank describes is real—and it arrives well before AGI.

For the global AI race, this doesn’t slow fundamental model progress, but it could reshape who captures value. If Indian IT giants struggle to translate their client relationships into differentiated AI platforms, more of the upside will accrue to US labs and hyperscalers that control models and infrastructure. On the other hand, pressure on margins may force Indian firms to get serious about building proprietary agents, vertical copilots and integration IP rather than just reselling someone else’s API.

The medium‑term risk is that a large swath of mid‑skill IT jobs gets squeezed before AI‑native roles fully materialize, amplifying social and political pushback. How India navigates that transition—from services powerhouse to AI‑product exporter or platform integrator—will influence both its domestic stability and its position in the broader AGI landscape.