India’s software exporters are steadily losing their sway on the country’s stock market as concerns over artificial intelligence-led disruption trigger a prolonged selloff in the sector.
The combined weight of five information technology companies in the NSE Nifty 50 Index has fallen below 7.6 per cent, the lowest at least since 2002, according to data compiled by Bloomberg. At their peak more than two decades ago, the cohort accounted for more than a fifth of the benchmark. The retreat marks a shift in leadership within India’s $5 trillion stock market, reducing the sector’s influence on benchmark returns.
The Nifty IT Index has slumped 29 per cent this year, compared with a 9 per cent decline in the broader gauge, as investors worry that generative AI could undermine the traditional outsourcing model that powered the industry’s rise in the early 2000s.
As IT stocks lose value, their weightings in major indexes have also shrunk, reducing the money they receive from the growing number of passive funds. Nifty 50-linked index and exchange-traded funds now manage about ₹5 trillion. At current weights, they hold about ₹350 billion of IT stocks, compared with roughly ₹1 trillion if the sector had retained its peak position in the benchmark.
First Published: Jun 24 2026 | 11:32 PM IST
