Indian IT Sector Faces AI-Driven Disruption Amid Market Selloffs and Industry Transition

India's $283 billion IT services sector faces significant disruption amid rapid advances in artificial intelligence (AI). While some experts and reports, including Citrini Research's 2028 scenario, warn of contract cancellations, job losses, and economic challenges due to AI-driven automation, industry leaders like HCLTech's CEO emphasize a painful but promising transition involving reinvention and efficiency gains. Market reactions include sharp declines in IT and cybersecurity stocks, driven by concerns over AI tools like Anthropic's Claude Code automating legacy systems. Analysts remain divided, with some viewing AI as a threat to traditional models, while others see it as an opportunity for growth and enhanced services.