Foreign Institutional Investors’ (FIIs) allocation to the Indian technology sector stood at an all-time low of 7.3% at the end of March. Ganesh Shirsekar/file

Indian IT companies are facing a double whammy from the advent of artificial intelligence (AI).

Not only are future business orders under risk, the increasing use of AI in workflows by the same tech firms is leading to what is called ‘AI deflation’ — or reduction in order values as efficiencies reduce costs, which is then passed on to customers.

This, naturally, has hit their share prices, with the National Stock Exchange’s benchmark Nifty IT index down 23% so far in 2026.…