A Silent Crisis Behind the Comfort Zone
For decades, India’s IT giants TCS, Infosys, Wipro, HCL, and Tech Mahindra have powered the global tech engine. But are they now sleepwalking into irrelevance?
They’ve powered backend systems for Fortune 500 companies, enabled digital transformations, and created millions of jobs. Their contribution to the economy and India’s global reputation is immense.
But now, an uncomfortable even alarming question looms large: Are India’s IT champions repeating Nokia’s fatal mistake?
Are Indian IT companies heading down the same path that once doomed Nokia?
Nokia: A Classic Case of Comfort Kills
Nokia wasn’t just a mobile company it was a symbol of global dominance in tech. At its peak in the early 2000s, Nokia had nearly 50% of the world’s mobile phone market. Its devices were iconic, reliable, and loved across the globe.
But then the world changed.
- Touchscreens arrived.
- iOS and Android reshaped mobile ecosystems.
- User experience, not hardware, became king.
And Nokia?
- It dismissed Android as a passing trend.
- It underestimated the power of apps.
- It stayed comfortable with its past success.
By the time it reacted, it was too late.
Now, Let’s Talk About Indian IT
The Indian IT sector may not sell mobile phones, but its current trajectory bears an eerie resemblance to Nokia’s downfall.
Here’s why:
1. Stagnant Revenue, Shrinking Profit Margins
Despite consistent media messaging and press releases, the numbers tell a different story:
– Revenue growth has dropped to low single digits in recent years.
– Profit margins are flat or declining, despite rising demand for digital services.
– Employee layoffs, frozen hikes, and deferred onboarding have become routine.
Instead of innovating or reinventing, many firms are cutting costs to look efficient.
Just like Nokia did when the cracks started showing.
2. Still Dependent on “Service to the West”
Indian IT’s foundational model is still largely intact:
– Provide IT manpower.
– Deliver outsourced services.
– Build what the West asks for.
There are internal platforms (Infosys NIA, TCS BaNCS, Wipro HOLMES), yes — but there’s no Indian equivalent of:
– AWS
– Slack
– Zoom
– Shopify
– OpenAI
We execute others’ innovation — but rarely drive our own.
In the platform and product-led global tech economy, this dependency is no longer sustainable.
3. No Major Technological Shift or Breakthroughs
Here’s a hard truth that’s often ignored:
Indian IT has not led or pioneered any major global tech shift in the last 10–15 years.
Let’s break it down:
| Global Tech Shift | Leaders | India’s Role |
| Cloud Computing | Amazon (AWS), Microsoft (Azure), Google (GCP) | Service integrator, not platform owner |
| AI & GenAI | OpenAI, Google DeepMind, Anthropic | User or integrator, not builder |
| Mobile-first revolution | Apple, Google | App developers, not OS innovators |
| SaaS/Platforms | Salesforce, Shopify, Stripe | Implementers, not creators |
| Semiconductor R&D | US, China, Taiwan | Consumers, not designers or manufacturers |
While the West and China are building, owning, and scaling, India is still servicing.
This technological stagnation means:
– We can’t compete globally in deep tech.
– We’re stuck at the bottom of the tech value chain.
– We remain vulnerable to global shifts — with little control.
Unless this changes, India will never create a Google, Tesla, or Nvidia — and Indian IT will never be more than a backend vendor.
4. Missing the AI Bus?
The biggest threat — and opportunity — to IT today is Artificial Intelligence.
Generative AI, no-code tools, and automated pipelines are now doing what once required full teams of developers and testers.
Many traditional IT functions are being:
– Automated
– In-sourced
– Replaced
But instead of investing heavily into AI-first products, most Indian IT companies are simply reskilling existing staff or wrapping AI buzzwords around old services.
Much like Nokia resisted Android, Indian IT risks resisting true AI disruption — and being left behind.
5. Comfort Over Courage
“The enemy of progress is comfort.”
Indian IT has grown comfortable with:
– Long-term contracts
– Predictable billing cycles
– Linear growth based on headcount
But comfort breeds complacency.
And complacency is deadly in tech.
Nokia was comfortable too — until the world changed.
6. Dividend Overdrive — Profits Spent on Optics, Not Innovation
Here’s another bitter pill: Indian IT firms are rewarding shareholders but starving innovation.
A major portion of profits is being paid out as dividends — instead of being reinvested into innovation, R&D, or future tech capabilities.
In recent years:
– Companies like TCS, Infosys, and Wipro have distributed 30% to even 80% of their net profits as dividends or buybacks.
– This keeps shareholders happy and boosts stock prices in the short term.
– But it also means less capital available for breakthrough innovation.
Contrast this with global tech giants like Apple, Amazon, Google, and Tesla:
– Apple famously paid no dividends during its explosive growth years, reinvesting every rupee into product development and R&D.
– Amazon, Google, and Tesla continue to pour massive resources into innovation, owning the future rather than just the present.
Indian IT must learn this lesson:
“Dividends don’t future-proof a company. Innovation does.“
What Must Change Now
The window for reinvention is closing. Here’s what Indian IT needs to do — urgently:
Invest in Deep R&D
Move beyond service delivery. Fund innovation labs, research centers, and next-gen product teams.
Build Global Products
Don’t just solve problems for clients. Solve problems for industries, consumers, and countries.
Own the AI Transition
Be creators of AI tools, not just users. Build India’s own OpenAI, not just wrappers around existing APIs.
Create Real Tech Shifts
Focus on deep tech — semiconductors, robotics, space tech, climate tech — not just dashboards and apps.
Think Like a Tech Creator, Not a Tech Vendor
To survive long term, Indian IT must own intellectual property, not just execution pipelines.
Reinvest Profits in Innovation
Stop excessive dividend payouts and instead fuel the future with those funds.
Final Thought: You Can’t Lay Off Your Way to Greatness
Indian IT firms are still respected globally.
They have the talent, the trust, the scale.
But they are not future-ready — not yet.
Without a bold leap forward — into AI, deep tech, global platforms, and product-first thinking — Indian IT may end up being the next Nokia:
Once great. Still respected. But ultimately — left behind.
What Do You Think?
Is Indian IT doing enough to reinvent itself?
Are we building the next global tech giant from India — or just clinging to past success?
Let’s talk. The clock is ticking.
