India’s IT services giants are racing to reinvent themselves for the age of artificial intelligence, rolling out new tools to customers from banks to sporting bodies even as the technology threatens to slash client spending in the near term.

The country’s vast outsourcing sector has been struggling with tepid customer demand for its services in the US, its largest market, as a “Trump bump” from anticipated tax cuts and easing regulations has failed to materialise. Instead, the US president’s trade battles — including a 50 per cent tariff slapped on India that nevertheless excludes services — have delayed business decision-making and investment.

Sector growth has been in the low single digits for the past two years, according to HSBC, which last month attributed the sluggishness to economic uncertainty, competition from corporate in-house global capability centres being set up rapidly across India, as well as “ambiguity” over the impact of generative AI.