What: India's IT sector grapples with a 51% AI skills gap despite contributing 58% to global outsourcing, revealing a pressing need for structured GenAI implementation strategies.

Why it is important: The disconnect between recognition and implementation reveals systemic challenges in training and support systems, requiring immediate attention as the industry transitions from GenAI to more advanced AgenticAI capabilities.

India's position as the global IT powerhouse faces a critical challenge as it navigates the GenAI revolution. Despite generating USD 250 billion in technology trade and employing over 5 million professionals, the country faces a widening talent gap, with AI-skilled talent demand outstripping supply by 51%, projected to grow further by 2026. The research reveals a complex adoption landscape where implementation lags despite high awareness. Only 27% of the workforce receives advanced, proficiency-based training, while 66% of delivery leads report client concerns about security and IP protection. The adoption conundrum is particularly evident in next-generation skills such as LLM fine-tuning, cloud computing, and cybersecurity. To maintain its competitive edge, the industry must deploy a multi-faceted approach, including customized training programs, scientific outcome tracking, and robust client communication frameworks. This transformation becomes increasingly urgent as the sector moves towards AgenticAI, requiring strong foundations in current GenAI capabilities.

IADS Notes: BCG's January 2025 survey confirms the report's central thesis, showing that while 75% of executives prioritize AI, only 25% achieve meaningful value . The implementation gap is stark - December 2024 data reveals just 10% of retailers successfully scale their AI applications . Yet, success stories are compelling, with October 2024 findings showing 87% of GenAI implementers achieving 6%+ revenue growth . The technical hurdles identified in the report align with March 2024 research, where nearly half of retailers struggle with data integration despite high adoption rates .

The GenAI adoption conundrum in India