India’s AI reckoning: The end of the labour-arbitrage era

The recent sell-off in technology stocks was treated by many as just another bout of market volatility. But instead of thinking of it as a random market panic, it shows something else.

In a matter of weeks, Indian IT companies lost nearly INR 6 lakh crore in market value. The Nifty IT index dropped more than 20 per cent, one of its sharpest corrections in decades. This was not triggered by a collapse in earnings. It was triggered by anxiety: AI is beginning to change the economics of the very model on which India’s IT industry was built.