Union Minister Ashwini Vaishnaw says Indian IT is transitioning from manpower-led services to AI-led services — powered by GCCs and data centre infrastructure. But what does this mean for investors?

On February 7, 2026, Union Minister Ashwini Vaishnaw announced that India’s Global Capability Centre (GCC) count has crossed the 2,000 mark — a milestone that signals more than just growth in office parks.

It signals a structural pivot.

According to the Minister, Indian IT is not stagnating. It is reinventing itself — moving from labour-arbitrage outsourcing to AI-led value creation. The twin engines of this shift?
GCC expansion and AI infrastructure buildout.

But while the strategy may be sound at a national level, the implications for listed IT companies are more nuanced.

Let’s break this down.

From Outsourcing Hub to “Innovation Laboratory”

India’s GCC count has grown from roughly 1,700 in 2024 to over 2,000 in early 2026. These centres now:

• Employ ~2 million professionals

• Contribute an estimated $70–80 billion annually to GDP

• Handle end-to-end global product lifecycles

This is not back-office BPO.

This is “Ownership Mode.”

Multinational corporations are no longer using India primarily for cost efficiency. They are building:

• AI-driven product R&D

• Full-stack engineering teams

• Sector-specific AI deployments (shipping, retail, healthcare)

The qualitative shift is clear: GCCs are exporting AI solutions — not just coding services.

The Five-Layer AI Architecture

Vaishnaw outlined what can be described as a “Five-Layer AI Stack” — a national blueprint for AI leadership.

This is a full-stack ambition — from electrons to algorithms to applications.

Data Centres: The Strategic Moat

If AI is the engine, data centres are the power grid.

The Union Budget 2026 introduced key reforms:

• Tax holiday until 2047 for foreign cloud providers operating via India-based data centres

• Equal tax treatment for domestic and foreign investors

• Recognition of data centres as critical national infrastructure

• A projected $200 billion investment pipeline

Why this matters:

• AI services cannot scale without compute

• Data localisation affects latency and compliance

• Owning infrastructure reduces strategic dependency

Even if AI models commoditise over time, infrastructure remains defensible.

The “Trifecta” Model: Academia, Industry, Government

To prevent an AI talent gap, the government is pushing synchronization across three pillars:

• Academia → Updated AI-ready curriculum

• Industry → Standardized skill frameworks

• Government → Policy, capital, and infrastructure support

Over 200 engineering colleges have already revised B.Tech and M.Tech programs to include AI and semiconductor engineering. The IT sector is also working toward common AI curriculum standards across its ~10 million talent base.

This coordinated push is designed to pre-empt disruption rather than react to it.

Where This Clashes with the Bearish View

The public markets have not fully bought into this optimism.

Recent commentary around AI suggests:

• AI is an extinction-level threat to traditional IT services

• CEOs may be underplaying disruption

• Valuations do not fully price AI-driven cannibalisation

Vaishnaw’s view differs sharply:

So who’s right?

Possibly both — at different layers of the ecosystem.

The Uncomfortable Middle Ground for Investors

Here’s the nuance.

1. GCC Growth ≠ Listed IT Profits

GCCs often:

• Hire directly

• Build captive teams

• Reduce reliance on large IT vendors

They are excellent for India’s economy.
They are not automatically positive for TCS or Infosys shareholders.

2. AI Services Are Real — But Margins May Reset

AI-led delivery means:

• Fewer people

• More output

• Faster turnaround

That’s fantastic for clients.

But it threatens:

• Billing by headcount

• Long-duration manpower contracts

• Linear revenue growth models

Revenue may hold.
Margins and valuation multiples may not.

3. Transition Winners Are Not Guaranteed

History offers caution:

• Nokia invested heavily

• BlackBerry pivoted aggressively

• Effort did not equal outcome

In AI, value could accrue faster to:

• AI-native firms

• GCC-led captive units

• Platform-first players

Incumbency is not immunity.

Beyond the Sell-Off: Hardware and Manufacturing

The government’s AI push extends beyond services.

• Two global manufacturers have expressed intent to set up AI server manufacturing in India.

• A single electronics facility near Bengaluru is projected to employ 40,000 people.

This signals vertical expansion into hardware and advanced electronics manufacturing.

What Should Investors Watch?

This is not a simple buy-or-sell debate.
It is a timing and selection problem.

Indian IT is unlikely to collapse.
But near-term pressure may persist.

Watch for:

• Clear AI-led revenue disclosure (not buzzwords)

• Margin resilience despite AI-driven efficiency

• AI wins beyond cost-takeout automation

• Valuations approaching disruption-cycle bottoms

Strategic Conclusion

Vaishnaw is right at the macro level.

India is building across energy, infrastructure, chips, models, and applications. The GCC explosion and data centre push represent a structural re-architecture of the services economy.

But markets price earnings, not strategy.

India may win from AI.
Indian IT companies may survive AI.
Yet investors still need a margin of safety.

The next few years will determine whether legacy giants reinvent themselves — or whether value creation shifts toward AI-native players embedded inside India’s rapidly expanding GCC ecosystem.

And that distinction matters far more than the headline number of 2,000.