Foreign investors pulled money from Indian technology stocks at the fastest pace in seven months during February, spooked by concerns that artificial intelligence could devastate the country's $250 billion IT services industry. Behind the market numbers are 5.4 million Indian tech workers wondering if their jobs will survive the AI revolution.
Foreign portfolio investors withdrew $892 million from Indian IT stocks in February, according to Reuters analysis of market data. The selling hit India's biggest names: Tata Consultancy Services, Infosys, Wipro, HCL Technologies, and Tech Mahindra all saw significant foreign ownership declines.
"The market is pricing in an existential threat to the Indian IT model," said Arjun Malhotra, a technology analyst at a Mumbai brokerage. "For 30 years, India's IT companies made money by sending engineers to do work that clients couldn't or wouldn't do themselves. Now AI can do that work faster and cheaper. Investors are asking: what's the value proposition?"
That's a question that Priya Deshmukh, a 28-year-old software engineer in Pune, asks herself daily. She works for one of India's mid-sized IT services companies, writing code for a European retail client. Her team of eight people manages updates to the client's e-commerce platform — exactly the kind of routine coding work that AI tools are increasingly capable of handling.
"We've already seen it," she said. "Last quarter, management told us we need to become 'AI-augmented developers.' What that really means is they want five people doing the work of eight, with AI handling the rest. Three of my colleagues will probably lose their jobs by June."
India's IT sector employs 5.4 million people directly and supports perhaps 15 million more through secondary employment — drivers, cafeteria workers, real estate, retail. The industry generated $254 billion in revenue in 2025, with about 80 percent coming from exports. It's the backbone of urban middle-class prosperity in cities like Bangalore, , , and .
