AI is not replacing outsourcing — it’s redefining it.
India’s outsourcing industry is poised for continued expansion even as artificial intelligence (AI) reshapes global business operations, according to Christoph Schweizer, CEO of the Boston Consulting Group (BCG).
In an interview with The Economic Times, Schweizer explained that rather than displacing traditional outsourcing, AI is accelerating the evolution of Global Capability Centers (GCCs) in India — adding a new layer of high-value, innovation-driven growth.
India’s Strategic Role in the Global AI Race
India stands out among emerging nations as a formidable player in the global AI ecosystem, thanks to its strong talent base, digital infrastructure progress, and pro-innovation policy environment.
While the United States and China dominate the AI race, India has joined a group of “emerging AI middle powers” that are scaling up rapidly.
“Among the emerging AI middle powers, Japan and Korea draw on their hardware and deep tech strengths, while Saudi Arabia and the UAE channel vast capital into data centers and upskilling. India belongs in this group and brings real advantages,”
said Schweizer.
said Schweizer.
He added that India’s momentum stems from skilled and scalable talent, adaptable entrepreneurs, and targeted government programs promoting digital innovation and AI research. Together, these factors position India as a global hub for AI-led value creation.
GCCs: The Next Engine of Growth
Contrary to fears that AI will reduce demand for outsourcing, BCG predicts that the IT outsourcing market will continue to expand — but in new ways.
Multinational companies are increasingly establishing Global Capability Centers (GCCs) in India to build AI and digital expertise internally.
“Global companies are setting up advanced centers in India, many focused on AI. What began as a cost play has become a capability play, driven by exceptional and differentiated talent,” Schweizer said.
This marks a major shift in India’s outsourcing story — from cost efficiency to capability excellence, with GCCs serving as the innovation backbone of global enterprises.
Transformation in Consulting and Talent Models
Even the consulting industry is undergoing transformation as AI takes over traditional research and analysis functions. BCG, for instance, has reshaped its talent mix, employing over 3,000 AI and digital specialists in its advanced analytics division, BCG X.
This reflects a broader trend across industries: organizations are adopting hybrid human-AI models, where technology augments human expertise rather than replaces it.
From Cost Optimization to Value Creation
The rise of AI signifies a shift from volume-based outsourcing to value-driven capability development.
For markets like India and the Philippines, this evolution presents both a challenge and an opportunity — to move up the value chain into data science, research, analytics, and AI governance roles.
Ultimately, AI is elevating the outsourcing ecosystem, rewarding countries that can combine adaptable talent, innovation capacity, and strategic foresight.
Conclusion
AI is not the end of outsourcing — it’s the beginning of a smarter, more resilient phase.
With GCCs leading the charge, India is poised to remain the world’s innovation engine, powering the next decade of digital transformation and enterprise growth.
With GCCs leading the charge, India is poised to remain the world’s innovation engine, powering the next decade of digital transformation and enterprise growth.
Visit Our News section and follow us on LinkedIn and Twitter
Read more full news: Here
