Why AI Agents Threaten The Foundation Of Indian IT

InnovationCloudWhy AI Agents Threaten The Foundation Of Indian ITByJanakiram MSV,Senior Contributor.Forbes contributors publish independent expert analyses and insights. I cover emerging technologies with a focus on infrastructure and AIFollow AuthorJun 10, 2026, 11:40pm EDTDatacenterUnsplashAt TCS's 31st annual general meeting on June 9, N. Chandrasekaran, chairman of Tata Sons, described AI as the largest growth opportunity in the company's history. He predicted that TCS will soon run as many AI agents as it employs people, and that governing AI systems will become the next recurring revenue annuity for the firm.The optimism is understandable, but the threat from AI agents is more immediate than the opportunity. The same modernization work that built the Indian IT services industry is now being automated by the hyperscalers these firms resell. Amazon's AWS Transform deploys AI agents that handle the code analysis, dependency mapping, refactoring and test generation that TCS, Infosys, Wipro, HCLTech, Tech Mahindra and Cognizant have billed by the hour for two decades. More importantly, one of the largest cloud platforms is offering the core modernization capability at no additional charge.How Indian IT Built Its AnnuityTo understand the threat, we need to look at the evolution of the Indian IT services model. It began with labor arbitrage, as Indian firms delivered software development and maintenance at a lower cost than onshore teams. Custom application development followed, as clients outsourced the building of their systems. The build then hardened into application maintenance, where one-time projects became long-running support contracts that billed year after year. Cloud migration and modernization programs opened the next revenue pool, and managed services extended it. AI agents now go after the repetitive work inside maintenance and modernization, where the annuity, not the build, was always the profitable half.Inside AWS TransformAt its core...