India's technology sector has reached a valuation of $254 billion, increasing by 3.8 percent (year-on-year) in FY24. The technology industry hired 5.43 million workers, experiencing a growth rate of 1.1 percent in FY24, emphasizing skills in Generative AI, cloud technology, and cybersecurity.

The expansion into tier 2 and 3 cities is seen as critical to bridging talent shortages, according to Grant Thornton Bharat's '2025 Tech Trends Report'. "As far as India is concerned, technology companies will need to navigate the business growth challenges as well as seize the new opportunities from Generative AI and new tech in 2025," said Raja Lahiri, partner and technology industry leader, Grant Thornton Bharat.

The nation's emphasis on GenAI and Engineering Research and Development (ER&D) services fueled a 7.4 percent increase, with aerospace, defense, and automotive spearheading digital engineering initiatives. Additionally, the report indicated that India continues to be a center for technological innovation with 1,700 global capability centers (GCCs), supported by investor enthusiasm and a robust start-up environment.

"India is expected to continue to dominate the global technology services market driven by the availability of massive tech, engineering talent as well as high-quality business and digital transformation impact on global clients," Lahri added.

In spite of obstacles, the industry's extensive talent resources and increasing integration of generative AI, SaaS, and digital transformation initiatives prepare it for a gradual rebound in 2025. The report indicates that Indian firms should build and nurture a culture of superiority in quality, innovation, and customer experience to dominate the tech industry in the coming year.