&imwidth=800&imheight=600&format=webp&quality=medium "Is Indian IT sector going to die? Viral Citrini report warns of 2028 ‘collapse’ as AI replaces labour arbitrage")
As the Indian information technology sector trembles amid mounting artificial intelligence fears and a record equity sell-off in the markets, the Nifty IT index has witnessed a severe bloodbath in recent days, hitting a 30-month low on Tuesday and wiping out nearly ₹10,000 crore in foreign investment from Indian tech stocks in just the last few days. The sell-off is driven by an “AI panic trade” triggered by a research report and the launch of Anthropic’s Claude Code this week.
A report published by Citrini Research and co-authored by Alap Shah has fuelled fresh AI concerns for the IT sector. The report, titled “The 2028 Global Intelligence Crisis,” maps a doomsday scenario for India’s prized sector, which has long been the preferred choice of the country’s top talent.
It presents a fictional perspective set on June 30, 2028, looking back at how AI decimated the global services economy, especially the Indian IT industry, which relies on cheaper software solutions for customers in advanced economies such as the US.
Citrini argues that India’s services model was built on providing developers at a fraction of Western wages. However, with the advent of “agentic AI,” the marginal cost of a coding agent has collapsed to the cost of electricity, potentially rendering Indian developers obsolete.
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The report further introduces the idea of “Ghost GDP,” contemplating a scenario where corporate profits and productivity (GDP) soar on paper but are not passed on to humans as they are replaced by AI, leading to a halt in money circulation back into the consumer economy.
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It predicts that by 2027, the $200+ billion services surplus that anchors India’s economy could “evaporate,” causing the rupee to crash by 18% and forcing India into preliminary bailout talks with the IMF.
It also sketches a “2028 reality” in which clients at prominent companies like Infosys and Wipro begin cancelling contracts to build software internally using artificial intelligence.
The IT and Business Process Management (IT-BPM) sector accounts for approximately 7.5% to 8% of India’s total GDP and contributes over 25% of the country’s total export earnings. The sector employs nearly 5.8 to 5.95 million professionals and acts as a primary source of foreign exchange, bringing in an estimated $224 billion in revenue for FY25.
In contrast to the Citrini report, analysts from JPMorgan and HSBC argue that even if AI can write perfect code, human experts will still be needed to “plumb” it into massive corporate systems without breaking them.
NASSCOM recently underlined that upgrading global legacy code (like COBOL) is a $1.6 trillion opportunity, and AI does not kill that work; it simply makes it faster, allowing Indian firms to handle larger volumes of projects.
India has also begun preparing for potential strain on the outsourcing industry through Global Capability Centres (GCCs), over 50% of which are now located in the country, further strengthening its position as a global R&D hub.
