I'm working for a US‑based big healthcare firm and we recently handed a project over to an Indian IT services company. They put five people on it for six months and delivered a product that was just terrible – the code was sloppy, the design was weak, there was no proper authentication and not even a deployment guide. They had shown us a high‑level design, but the final outcome was far below expectations. One of our own developers could have built the whole thing in under a month using Claude code. Even senior leadership is seeing the gap. It makes me wonder if the whole Indian IT services industry is headed for trouble. Since we started using Claude code, our own developers have become a lot more productive and we're shipping features faster. If a single developer can maintain several business apps and also work on new POCs, why would we keep hiring external teams?
There's too much politics and ego at the top. Instead of innovating, they cling to a 'babu' mentality. AI and offshoring to LATAM and Eastern Europe will eat their lunch. Those firms need to pull their heads out of the sand, and fast.
Exactly. Most outsourcing firms have staff who aren't great at anything. AI‑generated code isn't perfect, but it's often on par with, or even better than, what the entry‑level workers in Indian IT can produce.
You're outsourcing risk, not just the work. Real‑world IT isn't clean‑slate coding – it deals with legacy systems, regulatory compliance, vendor integrations and a lot of internal politics. AI can't navigate a client's bureaucracy or take on that risk. Even with AI tools you still need people to manage, customise and validate the output. Indian engineers using AI are still cheaper than their US counterparts using the same tools. The Indian IT sector is being reshaped – some will feel the pain, others will profit. "It won't fade away for the same reason that vibe‑coders won't displace Uber: the value isn't in the product, it's in the network of relationships and regulatory arbitrages formed by its creation." – FT I saved that quote when the Sassocalypse started and it was the main reason I began buying the stocks.
There's no shortage of selfish senior leaders who hand out contracts for kick‑backs. Why did your company outsource when it could have done the work internally? Many US firms have free‑riders and old‑timers who prefer to offload work to diligent Indian engineers. Indian outsourcing firms will find ways to stay relevant.
I'd call the market saturated rather than collapsing – a total collapse is unlikely. Sure, you could build an app in‑house, but for a medical company IT is an expense centre. You can't keep adding LLM processing power and expect the internal team to handle it without risking knowledge concentration. Imagine this: in five years the large‑scale LLMs become subscription‑based and need high‑end compute. You'll still need specialists – let's call them 'WITCH' – to manage multiple AI bots and the cloud infrastructure. They'll handle maintenance, cut infra costs, manage licences and act as partners alongside your own IT department. The cost may not be huge, but it will stay roughly the same.
You can't expect much from fresh 3 LPA joiners at TCS. However, high‑skill software engineers will continue to see salary hikes and remain in demand.
People are overly optimistic about AI.
That argument is weak. It shows you didn't give clear requirements, didn't track milestones, and didn't even do an initial team assessment.
It looks like the OP doesn't get what software development really means. Many people today think writing code is the same as full‑stack development. It's a shame you got a low‑quality product, but probably your management paid peanuts for it. India does have very skilled IT talent – if you're willing to pay for it.
I partly agree, but remember that 'code' is just one piece of a mature software company. You also need distribution, maintenance, customer relationships and a whole commercial and intellectual infrastructure around a SaaS product. Growth may slow, and some layoffs will happen to keep margins healthy, but a total collapse of the Indian IT sector is unlikely given the current supply‑demand dynamics.