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AI Focus for New NASSCOM Chief
Srikanth Velamakanni, a leading figure in India's artificial intelligence field and co-founder of Fractal Analytics, now leads NASSCOM, the main industry group for the nation's technology sector. This appointment signals a strategic shift to focus NASSCOM's agenda on AI-first innovation and product development. Velamakanni’s background at Fractal Analytics, which recently completed a ₹2,834 crore IPO, brings a new perspective to the leadership, different from his predecessor at SAP Labs India. NASSCOM President Rajesh Nambiar stated the immediate focus will be on guiding the industry to align with global tech trends, particularly speeding up AI-driven services and encouraging product innovation.
India's AI Ambitions Globally
The Indian technology sector is set for significant growth, with NASSCOM expecting revenues to hit $315 billion by FY2026. This growth is supported by a surge in IT spending, predicted to reach $176.3 billion in 2026, fueled by large investments in AI infrastructure and data centers. Globally, AI spending is projected to reach $2.52 trillion in 2026, a 44% increase year-over-year, showing the huge market opportunity. NASSCOM aims to make India a top hub for autonomous systems and specialized AI products, building on its current strengths in analytics and enterprise AI services. The industry body is also highlighting Agentic AI and responsible AI as key strategies.
Valuations and Market Competition
As Velamakanni steps into his new role, companies like Fractal Analytics and co-leader KPIT Technologies face different market valuations. Fractal Analytics, a small-cap IT software company, has a market value of about ₹16,500 crore and a price-to-earnings (P/E) ratio of 71x to 103x over the past 12 months. Its stock traded around ₹972 in late April 2026. KPIT Technologies, also in IT software, has a larger market value of about ₹20,158 crore, with a 12-month P/E ratio between 27x and 37x. Some analyses suggest KPIT is undervalued compared to its past performance and industry peers. KPIT Technologies is a key player in embedded software and AI solutions for the automotive industry. Although NASSCOM members cover many technology services and products, the new leadership might subtly shift competitive focus towards AI-native solutions and intellectual property development.
Challenges Ahead for the Tech Sector
Despite the positive outlook for AI, the Indian IT sector faces challenges. AI technologies that boost efficiency could also reduce service revenue by requiring fewer human hours. NASSCOM acknowledges that the AI transition could lead to slower growth in the short term. Geopolitical issues add significant risk and uncertainty, potentially delaying key industry decisions. A continuous shortage of AI and machine learning talent is a major hurdle. Also, AI infrastructure spending being concentrated among a few large cloud providers raises questions about long-term market stability. The industry is also working to integrate AI into business processes, moving from experiments to delivering real returns on investment. This requires readiness in both workforce skills and organizational structure.
Looking Ahead: AI-Driven Growth
Velamakanni envisions AI enhancing the Indian tech industry, creating multi-trillion-dollar opportunities and boosting employment as growth returns. Under his leadership, NASSCOM is expected to champion this AI-driven growth for both services and products. Focusing on IP-led innovation, deep-tech skills, and preparing the workforce for Human+AI collaboration shows a proactive approach to navigating the changing tech landscape and strengthening India's role as a global tech partner.