By Rest of World
Publication Date: 2026-02-06 09:00:00
On February 4, India’s $300 billion IT sector faced a moment of reckoning.
The country’s benchmark IT stock index plunged nearly 6% in response to Anthropic’s release of agent plugin Claude Cowork.
The new plugins are designed to automate the very heavy, repetitive knowledge work that has been the bread and butter of Indian IT: contract reviews, regulatory compliance tracking, and revenue forecasting, among others. The stock sale was triggered by fears that customers could now use AI for such tasks instead of outsourcing them to companies in India.
The Indian IT model is now under existential pressure.”
This was the first concrete sign of the long-feared AI threat to the industry, which accounts for 10% of India’s GDP and directly employs 5 million people.
Indian IT companies have been preparing for this possibility. Nevertheless, experts who have closely monitored the industry believe that many of these companies and their services will soon…
