A Welcome Return to Growth
According to the Naukri JobSpeak Index, the Indian IT sector recorded a 6% year-on-year increase in hiring activity in July 2026. This marks a significant reversal from the 3% decline witnessed just a month prior in June, signalling a positive start to the second
quarter of the financial year. This uptick is a breath of fresh air for an industry that has been grappling with global economic headwinds, project delays, and a general slowdown in recruitment. The overall sentiment is one of cautious optimism, with experts noting that the market is steadily gaining momentum after a period of unpredictability.
The AI Engine Powering the Recovery
The undeniable star of this recovery story is Artificial Intelligence. Roles in AI and Machine Learning (ML) surged by an astounding 33% year-on-year in July. This isn't a new phenomenon but an acceleration of a consistent trend; AI and ML have been the strongest-performing segments in the white-collar job market for over two years. Within the IT sector specifically, demand for AI-related roles grew by 30%. This intense demand highlights a major shift in the industry. Companies are no longer just hiring for volume; they are strategically recruiting for high-value, future-ready skills that can provide a competitive edge.
The Skills in Demand
The demand is not just for general AI knowledge but for specialized, high-impact talent. Companies are actively seeking AI/ML engineers, data scientists, and DevOps engineers who can build, deploy, and scale intelligent systems. The growth is particularly strong for experienced professionals. Hiring for senior AI/ML candidates with 13-16 years of experience jumped by 67%, and those in high-income brackets (above ₹50 lakh annually) saw a 64% increase in demand. This indicates that companies are willing to invest heavily in senior talent capable of leading complex AI initiatives. Alongside AI, demand for professionals in IT and information security also saw a healthy 23% growth, underscoring the importance of securing the new digital infrastructure.
Beyond the Metros
While traditional IT hubs like Bengaluru (8% growth), Chennai (11%), and Hyderabad (16%) contributed significantly to the recovery, the growth story is becoming more geographically diverse. Kolkata led the major cities with a 17% year-on-year increase in hiring. More notably, emerging cities are becoming key centres for talent, especially for freshers. Jaipur, Coimbatore, and Kochi all posted strong double-digit growth in fresher hiring. This trend extends to Global Capability Centres (GCCs), which saw a 5% increase in hiring, particularly in southern markets, as they continue to expand their footprint in India with a focus on specialised roles.
A Two-Speed Recovery?
While the 6% growth in IT is promising, it's important to see the bigger picture. The recovery is not uniform across all roles. While AI and IT security are booming, many other sectors are still facing declines, including education, hospitality, and telecom. Even within IT, the focus has shifted decisively towards skills-based hiring. Employers now expect even freshers to have foundational knowledge of AI tools and data analytics from day one. This creates a two-speed market: one track for those with future-ready skills who are in high demand, and another for those in traditional roles where hiring remains flat or is declining.
