India’s software industry is well set up to reinvent itself in the Artificial Intelligence (AI) era and Indian IT sector will be better off with AI as there will be improved productivity, Anand Deshpande, Founder, Chairman and Managing Director of Persistent Systems Ltd, has said.
At the ongoing Indiaspora ‘Forum for Good’ 2025 summit in Abu Dhabi, Deshpande highlighted the tremendous opportunities AI presents to India’s software industry, claiming that the country’s IT sector will significantly benefit from integrating AI technologies.
According to Deshpande, the future of India’s software industry is one of higher productivity, particularly because AI will enable businesses to optimize their processes, enhance decision-making, and innovate faster than ever before.
With over 700 leaders of Indian origin from 35 countries and representing diverse professions, the summit provided a platform for forward-thinking conversations about India’s potential for reinvention in the AI-driven world.
“AI is going to change the way we work,” Deshpande said, adding that while this transformation will bring tremendous benefits in terms of efficiency, it also presents challenges for the Indian software sector, particularly in terms of its traditional business models.
He explained that Indian IT companies have long operated on a model where pricing is closely tied to the number of individuals employed to perform services. However, AI has the potential to disrupt this model by enabling automation and enhancing productivity in ways that don’t rely as much on human labour. Deshpande’s key point was that India’s IT companies must rethink their pricing strategies to reflect the productivity gains AI can offer.
“The challenge we will have is convincing ourselves that we will have better ways of charging our customers, and not necessarily connecting it to the individuals we have, which is the model we have used for the last 25 years,” he said.
The future of Agentic AI
Deshpande also delved into the future of AI, pointing out that the next big leap will be in Agentic AI. This cutting-edge AI system autonomously makes decisions, adapts in real-time, and solves multi-step problems based on contextual goals.
Agentic AI represents the evolution of current AI models into systems capable of acting independently, with minimal human intervention. By leveraging advanced AI agents and large language models (LLMs), Agentic AI will become a game-changer in industries from software development to healthcare.
Deshpande stressed that it is this kind of AI engineering that India’s software industry should focus on to stay ahead in the global market.
Counterpoint: AI’s impact on jobs
While Deshpande is confident that AI will be a boon for India’s software industry, Ashish Dhawan, Founder and CEO of the Convergent Foundation, offered a slightly different perspective on AI’s role in India.
He acknowledged that AI might disrupt jobs in some sectors, particularly in manufacturing, but he felt that the broader impact on jobs in India would be less pronounced. “Most jobs are very basic jobs, and I don’t see them disrupted by AI,” Dhawan stated. He suggested that the true challenge for India lies not in AI-induced job loss but in the nation’s ability to adapt and scale its industries for growth.
Dhawan also stressed that India’s growth depends on a streamlined business environment. He noted that while India excels on the macroeconomic front, micro-level regulations still pose significant hurdles to entrepreneurship. “We still have the same labour codes, the same inspector raj,” Dhawan said, referring to outdated bureaucratic practices that stifle innovation and growth at the grassroots level. He argued that removing unnecessary regulations and promoting economic freedom for entrepreneurs would unlock India’s full growth potential.
A call for R&D investment
While Deshpande and Dhawan focused on AI and business regulation, Sudhir Sethi, Founder and Chairman of Chiratae Ventures, raised an important point about the need for greater investment in research and development (R&D).
Dhawan said that India cannot India cannot win in global markets unless we step in R&D investing. “That is the message that needs to go out. It is a mindset problem. Corporate India has enough resources, it is under leveraged and has enough cash in balance sheet”.
He proposed introducing a “capital PLI” (Production Linked Incentive) programme to supplement the current sector-specific PLI system. Such a programme, Sethi argued, could foster innovation by directing investments in R&D, enabling India to remain competitive in the global market.
(This writer is at Abu Dhabi at the invitation of Indiaspora)
