Can Indian IT move up the value chain?

THERE HAVE BEEN many naysayers in the last three decades who criticised Indian IT for only trading on its vast pool of trained manpower and putting them on client projects onsite and offshore.

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The clamour to build products and intellectual property out of India has been louder after the recent launch of StarGate from US and DeepSeek from China and there is an expectation that Indian innovation will come to the fore with a slew of large language models and AI products and platforms emerging from Indian startups and incumbent services firms.

The national and industry hype about human-centric AI solutions from India has also generated optimism! However, a reality check will show that we are still far from converting this mirage into real dollars.

What we lack are three key enablers—very weak levels of core research with the overall national levels of 0.7% of GDP falling far short of global averages of 3%. The ecosystem to support entrepreneurs through all stages of capital needs is also missing with angels, venture capitalists and private equity wanting definite returns in three to five years. And finally, do we really have a new breed of entrepreneurs who will focus on deep tech and product thinking and stay the course without getting distracted by the easy and profitable revenues of services?