'There's a $400 bn opportunity': Nithin Kaimal says India's software startups, services AI competing with Silicon Valley

Nithin Kaimal, Partner & Chief Operating Officer, Bessemer Venture Partners India, was highly optimistic about the Indian IT sector making a rebound in the next 3-5 years. During a panel discussion at the Business Today AI Summit 2025, Kaimal said that India has a $400 billion opportunity in the sector.

He mentioned that, be it Indian software startups or Indian services AI, they are competing with the players in Silicon Valley. 

"There is a $400 billion opportunity; it's a massive opportunity. But it's a level playing field. The Indian software startup or the Indian services AI is competing with Silicon Valley, is competing with player in London or in Eastern Europe," the BVP India Partner and CEO said. 

He added that Indian startups have an absolutely great advantage in going and grabbing the opportunity. 

Kaimal, however, said that there will be a step change in outsourcing in the sector over the next 3-5 years due to artificial intelligence. He added that software or EAX and other backend ops steadily came from Europe and the US, of which India was a huge beneficiary. 

"I think there's a very interesting phenomenon, which will play out over the next 3 to 5 years, which is a step change in outsourcing. Also globally, it's been increasing. Software or even EAX and all sorts of back office operations, steadily more and more of it from Europe and the US, have come, and India has been a big beneficiary of that." 

He added that AI will completely change the scenario in this case, as a lot of the loss functional supply chain and other things related to the customer ecosystem are still managed in-house by large teams or done by vendors based in the said markets. 

"I think AI tools get smarter, vertical AI and horizontal AI solutions get smarter. CXOs will be a lot more willing to outsource even those complex use cases. So, I actually believe that there will be a step change and willingness. That outsourcing can either happen to a very smart AI software or to a very proficient software backed by a human being right depending on the use case."

He added that this would create an entirely new total addressable market (TAM) worth $150-160 billion for a lot of SMEs.