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Year-over-year growth for AI engineering jobs in India, outpacing global markets.

India's IT services industry is under pressure from AI, and simultaneously, India's broader technology sector is accelerating because of it. Both things are true at once, and European businesses need to understand the distinction.

AI-optimised servers, data center build-outs, AI related research: Global IT spending has increased from USD 6.15 trillion in January to USD 6.31 trillion in March and is almost entirely driven by AI-related spending, according to Gartner. The IT services segment grows at 3-4% per year, but the shift towards the AI operating layer through agentic models is opening up substantial new opportunities for India's service industry as demand from global businesses increases.

A new LinkedIn report confirms Gartner’s expectations, as job posts for AI engineering roles have increased by 59.5% year-over-year in India, outpacing both the US and Europe. This development spans several industries, including manufacturing, and signals an ongoing transformation of India's technology ecosystem. This mirrors what I see firsthand across the GCC sector, as global multinationals are increasingly establishing in-house technology hubs in India to access exactly this talent in cutting-edge fields.

The pressure side of the picture is equally real. While revenues remain stable, Gartner’s expectation on margin pressure was confirmed by Wipro, one of the top IT services players in India, in their recent earnings report. A signal worth watching across the broader IT services sector.

Beyond the IT services industry, India’s technology sectors shows substantial growth. US tech is considered a key investor in the market, but several developments show the market’s depth and pace of development:

Three key signals matter for European businesses here. Companies with GCCs in India are sitting on a structural AI talent advantage, with 59.5% year-over-year growth in AI engineering roles outpacing both the US and Europe. India's data center buildout is increasingly relevant for European enterprises designing Asia-Pacific data architectures, and the ten Indian AI startups cohort to Paris should be tracked by European VCs and corporations. Depending on where you seat on the table, margin pressure for Indian IT vendors might give European buyers more renegotiation leverage moving forward.

Sources: Gartner, BusinessWorld, IndianWeb2, Financial Express, The Economic Times, Times of India, Moneycontrol

Companies grow their market share and market positioning in three ways–organic growth, M&A, or Joint Ventures (JV). The development of four large cap corporations over the past week symbolise two developments that are expected to heat up: JV formations to establish a foothold in India, and well-funded Indian businesses expanding in international markets through M&A.

I first mentioned an upcoming JV between Jio and Allianz back in July 2025, when both companies signed a non-binding agreement. This was after the German insurance leader sold its JV with Bajaj-Group back in March 2025 to refocus its services offering in the Indian market. The now announced binding agreement for a JV with Jio Financial Services, a leader in digital finance solutions, appears to be Allianz’ new strategy: a JV again, but with a different partner. Jio Financial Services has close to 30 million customers, used to be embedded in the Reliance ecosystem, and is affiliated to one of the world’s three largest telecom companies Jio Telecom (over 450 million customers).

This JV is a recurring model that I’ve shared for collaborations in other sectors before. And it makes sense. India is a fast paced market, and Allianz gains immediate access to a large customer base through the collaboration with a local player. Jio Financial Services on the other hand secures a worldwide trusted partner with over 130 years of insurance experience.

This brings me to the other point: M&A activity by Indian companies to expand oversees. After various substantial developments with European involvement last year (i.e. the acquisition of Italy’s Iveco by TATA, or the potential acquisition of Thyssenkrupp Steel Europe by Jindal Steel International - see India Rising 27), well capitalised Indian businesses announced large scale acquisitions:

Different strategies, but same result: market access and increased distribution. Most importantly though, it clearly shows that Indian businesses are well-funded and able to do all-cash deals to increase their footprint. And I think we will see more activity in Europe as well.

Sources: Allianz, Times of India, IndianWeb2

The automotive sector is arguably the poster child of the European industrial sector, especially in Europe’s strongest economy Germany, and therefore a key indicator of current economic sentiments. While the industry is increasingly struggling in its largest market China, impacts are widely visible in Europe with production output slowing down. India’s automotive market is growing, but European players continue to face an uphill battle that I think will further intensify.

Volkswagen cutting production by one million units symbolises the struggle of Europe’s automotive industry. India is now increasingly becoming a focus market for the industry to navigate the negative impacts in other automotive key markets, but the competition is heating up. Over the past few weeks, several key announcements tell us why:

These developments are critical for the following reasons. Honda has a higher market share in India than the Volkswagen Group and Renault combined, is a volume player, and therefore a competitor. Tesla on the other hand is considered a premium brand and will compete with companies such as BMW or Mercedes-Benz in a market that is expected to shift towards electric vehicles faster (see my recent shares on the electrotech revolution and implications of the Iran war) than in prior growth markets. And this is not yet considering the substantial investments by the market leaders Maruti Suzuki and Hyundai that I shared last year.

The European automotive industry risks making the same mistakes that they made in other markets before: underestimating the shift to electric vehicles and local customer demand. India as a market requires focus, local production, and market specific product offerings. It’s a fast-growing market for the industry, and should be treated as such.

Sources: Times of India, Deutschlandfunk

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