Investor and market commentator Shankar Sharma has sparked debate with his blunt defence of Indian IT companies. In a recent discussion, he pushed back against growing criticism that firms like TCS, Infosys, Wipro and HCL have "failed" to build AI products or platforms. His core argument was simple yet powerful: "People criticise them for not building AI. But that was never their model. They are service companies, and they've done that job exceptionally well. If they're expected to do everything, what are the other 150 crore Indians doing?" Sharma's comment cuts to the heart of a larger debate: what exactly should Indian IT companies be responsible for in the AI era?
The criticism Indian IT is facing
In recent years, Indian IT services companies have come under increasing scrutiny for several reasons:
- They have been slow to build their own AI products or platforms — unlike global peers or startups.
- A large part of their revenue still comes from traditional application development, maintenance and BPO work.
- They are sometimes characterised as "body shops" rather than innovation-driven companies.
- Global AI leaders — OpenAI, Google, Microsoft, Anthropic — are product-first companies, while Indian IT has largely stayed in services.
Many analysts and commentators argue that Indian IT missed the product wave in the 2000s and 2010s, and is now at risk of missing the AI wave too.
Shankar Sharma's counter-argument
Sharma makes a clear distinction between service companies and product companies. Indian IT giants built world-class capabilities in global delivery, cost efficiency, large-scale project execution, and managing complex enterprise systems across geographies. These strengths helped India become the world's back office and a trusted IT partner for Fortune 500 companies. According to Sharma, expecting these companies to suddenly pivot into building consumer-facing AI products — like ChatGPT or Midjourney — is unrealistic, and unfair.
He also raises a valid point about shared responsibility. If India wants to build AI products and platforms at scale, the onus cannot rest only on TCS or Infosys. It must involve:
- Startups and product companies.
- Research institutions and universities.
- Government policy and funding.
- Risk capital and an entrepreneurship culture that tolerates product-development risk.
- The broader talent pool of 150-crore-plus Indians, both domestic and diaspora.
The reality of Indian IT's business model
Indian IT companies were never designed as product companies. Their model has historically been:
| Aspect | Indian IT services model | Typical product company model |
|---|---|---|
| Revenue source | Project-based / time and material | Product sales plus subscriptions |
| Risk profile | Low — client pays for effort | High — build first, sell later |
| Talent focus | Large teams, execution excellence | Small high-skill teams, innovation |
| Margins | 20-25% | Can be 30-70%+ if successful |
| Scalability | Linear — more people equals more revenue | Non-linear — product scales easily |
This model delivered exceptional results for decades — creating millions of jobs, generating billions in forex, and building India's global reputation in technology services. However, the model is now under pressure because AI is automating many traditional services tasks, clients want outcome-based pricing instead of effort-based, and generative AI is changing how software is built and maintained at the level of individual developer productivity.
What Indian IT companies are actually doing in AI
It would be incorrect to say Indian IT has done nothing in AI. Most large companies have made moves:
- TCS has launched AI platforms and is aggressively building AI services and agentic solutions. NRI Globe's earlier piece on N. Chandrasekaran's 2028-30 AI agents vision covers TCS's specific bet.
- Infosys has Topaz (its AI platform) and is winning large AI transformation deals.
- Wipro, HCL and Tech Mahindra have all invested in AI capabilities and partnerships.
- Many are positioning themselves as "AI-first" service providers helping global enterprises implement AI.
The difference Sharma is pointing at is that they are largely playing the role of implementers and service providers rather than creators of foundational AI models or consumer products — which is a different game with different economics, different talent needs and different risk appetite.
The bigger question Sharma raises
Sharma's comment forces a deeper reflection. If Indian IT companies are primarily service-oriented by design and history, then who in India is supposed to build AI products, platforms and intellectual property? Possible answers include:
- A new generation of AI-first startups.
- Research institutions and academia.
- Government-backed initiatives and India AI Mission.
- Indian entrepreneurs willing to take genuine product risk.
- NRIs and global Indian talent returning or contributing remotely.
Expecting TCS or Infosys to single-handedly build India's AI product ecosystem is unrealistic. Their strength lies in scaling and delivering complex technology solutions globally — not in taking moonshot product bets that may not pay off for five to ten years.
The way forward
Indian IT is at an inflection point. The companies that will thrive are those that successfully transition from traditional services to AI-powered services and platforms, build strong AI capabilities internally, partner with or acquire AI startups, and help clients move from experimentation to enterprise-wide AI adoption. NRI Globe's analysis of AI agents in India IT services covers the four buyer-side shifts driving this transition.
At the same time, India needs a parallel ecosystem of product companies and deep-tech startups if it wants to move beyond being a services powerhouse. Shankar Sharma's point is ultimately about realistic expectations and shared responsibility. Indian IT has delivered extraordinary value by excelling at what it was built to do. Asking it to become something entirely different overnight ignores both its history and its strengths.
What is your view? Should Indian IT companies be expected to build AI products, or should their role remain focused on services and implementation? And who should take the lead in building India's AI product ecosystem? Share your thoughts in the comments. For more analysis on Indian IT, AI, careers and NRI-relevant business trends, stay with NRI Globe.
