India can build the AI engine, but can it build the next global tech giant?
India’s technology industry has become exceptionally good at solving problems for the rest of the world. Its engineers build software, develop products, undertake complex research and increasingly participate in the development of technologies that multinational companies consider strategically important. Yet a question persists beneath this success. How much of the value created by India’s engineering talent ultimately translates into globally competitive Indian technology businesses?
Sandeep Menon, Managing Director and GCC Head of Workato India, says, “The distinction between building technology and owning the business built around it is central to understanding India’s next phase of growth. The country has developed the capabilities to undertake increasingly sophisticated engineering work, but the emergence of companies that can convert those capabilities into globally scaled products remains a work in progress.”
His analogy is telling. India has moved beyond supplying individual components and is increasingly capable of building the engine. What it has yet to do consistently is build the entire Ferrari.
The distinction matters as GCCs assume greater responsibility for product development and AI reshapes the economics of building enterprise technology. India’s engineering depth gives it an advantage, but converting that advantage into intellectual property, product ownership and globally competitive businesses requires more than technical talent.
From executing tasks to building products
Menon’s assessment draws on his experience across product development, technology services and the GCC environment. He has witnessed how India’s role in global technology operations has changed, from delivering work at a lower cost to undertaking increasingly sophisticated assignments.
The original proposition behind labour arbitrage was straightforward. Companies could obtain comparable work at a lower price by moving it to India. But Menon never considered cost alone a sustainable competitive advantage.
As multinational companies began interacting directly with their Indian engineering teams, they discovered that these teams could undertake work beyond the original mandate. The relationship evolved as Indian professionals demonstrated their ability to solve more complex problems and deliver results faster.
“I think the GCC play shifted from being a cost play to a productivity play to, now, a skill set at scale,” Menon says.
AI is accelerating this change. As development cycles compress and companies seek to deploy new capabilities quickly, the ability to assemble specialised teams becomes more important than simply expanding headcount.
But the transition also exposes a limitation in how India’s technology industry has traditionally created value. Delivering sophisticated engineering work for a global company does not necessarily mean owning the product, its intellectual property or the business that ultimately monetises it.
For Menon, India has made progress, but the larger ambition remains unfinished.
“I think we have still not seen that,” he says of India’s emergence as a source of globally scaled product companies. He acknowledges the growing number of product-first startups, but argues that many have yet to achieve the scale and international presence required to compete with established global technology businesses.
The capital problem behind product ambition
The difficulty, Menon argues, is not simply a shortage of ideas or engineering expertise. Building a global product company requires the financial capacity to sustain long research and development cycles, establish an international sales presence and compete against companies with considerably deeper pockets.
He draws a comparison with China’s manufacturing ambitions, where government policy and incentives helped companies expand internationally. Indian product developers, by contrast, often have to finance their ambitions while competing against established global players.
“If you are an Indian product development company, you are still very much trying to fight global giants on your own,” he points out.
The economics can determine the limits of a company’s ambition. Developing a product requires sustained investment before commercial returns become predictable. Entering major markets such as the United States adds further costs, from business development to establishing a presence in competitive customer environments.
For a company without sufficient capital, the more viable option may be to build a component or develop technology for another business rather than finance an entire product and its global expansion.
Menon captures this progression through his engine analogy. “At least now we’re saying, ‘I build the engine.’ Earlier, I was saying, ‘I build one nut.’”
The next step, he argues, is to build the entire product.
That will require an ecosystem in which companies can finance extended R&D programmes, operate under taxation frameworks that support international expansion and access overseas markets. Menon believes policy support will influence whether India’s emerging product businesses can move beyond engineering capability to global commercial scale.
The argument is not that India lacks product companies. Rather, the challenge is to create the conditions in which more of them can grow into businesses with international reach and sustained investment capacity.
AI raises the stakes for Indian technology
The urgency of this question is increasing as AI changes both the work performed by technology companies and the skills they need.
Menon expects routine coding, testing and certain project management activities to face substantial automation. The implications extend to the employment model that has allowed India’s technology services industry to recruit large numbers of graduates and absorb them into formal work.
At the same time, enterprises need specialists who can integrate AI with existing business systems, design secure architectures and ensure that automated processes operate within appropriate governance controls.
The emerging demand is therefore not simply for people who can write code, but for professionals who understand how complex technology systems function together.
For India, this creates an opportunity to deepen its engineering capabilities. But it also raises a question about whether the country can translate that talent into businesses that own and commercialise the resulting technology.
Menon sees the employment consequences as a serious concern. “Will the industry still make money? Yes. Will we have a social problem? I think so,” he says.
His concern is that companies may continue creating substantial value with smaller, more specialised teams, while fewer conventional entry-level roles are available to graduates. The challenge for policymakers will be to develop opportunities for a wider workforce even as the technology industry demands more specialised skills.
The product question and the employment question are connected. India needs to develop advanced capabilities, but it also needs an economic environment in which those capabilities can support businesses, investment and jobs beyond a narrow pool of highly skilled professionals.
The unfinished journey
Menon remains optimistic about India’s ability to develop more ambitious technology businesses. He points to the growing presence of young professionals in product development and the expanding capabilities of the startup ecosystem.
But talent alone will not determine the outcome. Companies must be able to finance long development cycles, take products to international markets and compete with businesses that already have established customer bases and substantial resources.
The country’s GCC ecosystem can contribute to this evolution by deepening India’s experience in product development and exposing engineering teams to complex technology problems. Yet the existence of sophisticated GCC operations does not, by itself, guarantee the emergence of Indian-owned global products.
That distinction is the central test facing India’s technology ambitions. The country has demonstrated that its engineers can build increasingly complex technology for global businesses. The harder task is creating the commercial and institutional conditions that allow more Indian companies to own the products, intellectual property and global markets that emerge from that expertise.
India can build the engine. Whether it can build the next global technology giant will depend on what happens beyond the engineering floor.
