A hypothetical report crashes India's IT sector! Concerns over AI disruption intensify, leading to a massive sell-off of Indian software stocks

K-LinePoet · 2026-02-28T11:25:27+00:00

Citrini Research's report has raised concerns in the market about the impact of artificial intelligence on businesses, leading to a sharp decline in Indian software service stocks, with the Nifty IT index falling for five consecutive days. The report predicts that by 2027, Indian IT companies may face accelerated contract cancellations. Meanwhile, global markets also experienced a general decline in stock prices due to AI impacts.

K-LinePoet

2026-02-28 11:25:27

Abstract generation in progress

Recently, after the research firm Citrini Research released a report, market concerns about the impact of artificial intelligence (AI) on related companies have intensified, leading to a deep sell-off in Indian software service stocks.

On Tuesday, India’s Nifty IT index dropped nearly 5% intraday, marking its fifth consecutive day of decline. According to the report, Citrini analyzed potential risks that AI could pose to various sectors of the global economy, imagining scenarios in 2028 where AI causes white-collar unemployment, reduced consumer spending, and defaults on software-supported loans, leading to an economic contraction. However, the report emphasized that these are merely scenario assumptions, not predictions.

Citrini pointed out in the report that companies including Tata Consultancy Services (TCS), Infosys (INFY.US), and Wipro (WIT.US) are expected to face accelerated contract cancellations by 2027.

While tech stocks in other parts of Asia have risen due to optimism about hardware development, Indian IT service companies have become typical representatives of the “AI panic trading” in Asia.

Since the beginning of this month, Indian tech stocks have fallen approximately 20%, with a market value loss of over $54 billion. Investors are worried that AI tools launched by companies like Anthropic will continue to squeeze industry profit margins. On Tuesday, Infosys led the decline, hitting its lowest since June 2023; TCS and Wipro both fell more than 3%.

The report states, “The entire business model of Indian IT is built on a core advantage: Indian developers’ costs are far lower than those of their American counterparts. But now, the marginal cost of AI programming assistants has essentially dropped to just the level of electricity costs.”

The report also impacted the U.S. market, with logistics, payments, and software stocks generally declining, and IBM (IBM.US) experiencing its largest single-day drop in 25 years.

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