You can’t spell chai latte without AI. That will hurt India

India's USD 250 billion IT services outsourcing industry faces a structural challenge as global clients like Starbucks build in-house AI tools to replace enterprise systems previously maintained by Indian vendors. Tata Consultancy Services posted constant-currency revenue growth of just 0.4% in the quarter ended June, the slowest in a year, while HCL Technologies reported a 0.5% sequential decline, with both firms trimming headcount. Despite fresh wins such as TCS's expanded mandate with ABB and HCL Tech's USD 1.14 billion AI-driven European deal, contract pricing is expected to come under pressure as clients deploy fewer engineers and more AI.