New Delhi: The Nifty IT index dropped by around a fifth in March following a viral blogpost that imagined new AI coding tools would wipe the industry out altogether. Yet, all may not be lost. The Economist writes in ‘Why AI has not yet upset India’s IT industry’.
India’s massive IT workforce has found takers everywhere, and for decades, the IT industry has “profited from labour arbitrage”.
“IT consulting firms such as Infosys and Tata Consultancy Services (TCS) derive much of their revenue by providing customers with armies of Indian coders who perform labour-intensive tasks such as maintaining software, answering support tickets and writing routine code.”
Now, there’s a cheaper alternative: AI. AI tools like Claude, “can put together a prototype of a software application in minutes”.
Navigating AI would then require one skilled developer to oversee the coding and creation. “If one skilled developer armed with Claude can do the work of several, then businesses may find themselves with less need for the coders that Infosys and TCS provide.”
However, as the report notes, the AI revolution may present an opportunity for the consultancy arms of India’s outsourcers.
“They argue that they can now fulfil more of a strategic role for their clients: Getting the most out of AI requires understanding all of the context around the problem, something that consultants with experience across businesses can offer.”
Chris Kay of Financial Times reports on the Reserve Bank of India’s battle to protect the rupee from the Iran war fallout.
Since the conflict began nearly three weeks ago, the RBI has spent over $20 billion in foreign exchange, according to Mumbai bankers, to defend the currency, which has fallen 2.3 per cent against the dollar and hit another record low Thursday.
Over the past year, RBI has carried out record purchases of government bonds, including Rs 1 trillion ($10.7 billion) this month, to boost liquidity in the banking system and support the debt market. Still, India’s 10-year bond yield has risen by nearly 0.2 percentage points this year, the report highlights.
“The rupee ranks among Asia’s worst-performing currencies this year, reflecting rising concern over India’s swelling energy import bill, inflation risks, capital outflows and the stability of its current account.”
Economists at Goldman Sachs expect the rupee to weaken from around 93.2 to the dollar to about 95 over the next 12 months, placing India alongside Thailand and the Philippines among the Asian economies most exposed to the war’s fallout.
From India’s macroeconomics to cooking fuels, the war has sent shockwaves across sectors, Navin Singh Khadka of the BBC reports.
With LPG shortages leading to long queues across metropolitan cities in the country, people are now switching back to coal, kerosene and biomass.
“There are reports that suggest some regions in India are witnessing a spike in timber sales, while others see increased sales of cow dung cakes—both biomass fuels.”
Since the US-Israel war with Iran halted the movement of energy supplies through the Strait of Hormuz chokepoint, there has been fear of an LPG shortage, leading to hoarding and black marketeering.
Andrew Pulver of The Guardian reports on the Central Board of Film Certification (CBFC) blocking an Oscar-nominated film to maintain ties with Israel.
“The Indian release of ‘The Voice of Hind Rajab’, the Oscar-nominated Tunisian film about the death of a five-year-old girl during the Israel-Gaza war, has been blocked by the country’s ratings body.”
Manoj Nandwana of Mumbai-based Jai Viratra Entertainment has been reported saying that the film would “break up” India-Israel relations.
Written and directed by Kaouther Ben Hania, the film recounts the death of Rajab in January 2024 as she and her family tried to flee bombing in Gaza City. The movie uses real audio from her distressed call to emergency operators, whose roles are performed by actors.
The film was nominated for Best International Feature Film at the Oscars but did not win.
(Edited by Viny Mishra)
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