MUMBAI, Feb. 4 (GeokHub) — Shares of Indian information technology exporters fell sharply on Wednesday, tracking a global sell-off in software stocks, after new artificial intelligence tools from U.S.-based Anthropic heightened concerns over job displacement and margin pressure across the data and professional services industry.
The Nifty IT index dropped 6.3%, putting it on course for its worst single-day decline since March 2020, with all 10 of its constituents trading lower. The sell-off underscores growing investor anxiety over how rapidly advancing AI systems could disrupt India’s labour-intensive outsourcing model.
The decline followed Anthropic’s launch of new plug-ins for its Claude Cowork agent, designed to automate tasks across legal, sales, marketing and data analysis. The announcement triggered heavy losses in U.S. and European software and analytics stocks earlier this week and has now spilled over into Indian markets.
Infosys led losses among Indian IT majors, falling 7.3%. Tata Consultancy Services slid 5.8%, Wipro declined 3.9%, and HCLTech dropped 5.1%.
AI Threat to Labour-Heavy Model
India’s $283 billion IT services sector has long relied on deploying large teams of engineers and consultants to manage client projects. Analysts say that model is increasingly vulnerable as generative AI tools move beyond assistance into automation.
“As Indian enterprises integrate Claude into critical coding and workflow processes, the need for large vendor teams could decline,” said Ambrish Shah, an analyst at Systematix Group. “That risks squeezing billable hours, margins, and long-term employment growth.”
Shah added that advanced AI systems also threaten the entry-level talent pipeline by replacing routine development, testing and support tasks traditionally handled by junior engineers.
Broader Market Impact
The slump in Indian IT stocks mirrors a broader reassessment of software valuations globally, as investors question whether established service providers can defend their business models against rapidly improving AI platforms that promise faster output at lower cost.
While Indian IT firms have ramped up investments in AI and automation, concerns remain that widespread adoption by clients could reduce demand for traditional outsourcing services, particularly in commoditised areas of software development and data processing.
