India Built an Industry. The Philippines Hosted One.

In the struggle against AI disruption, one thing is clear: who owns the machine matters more than who runs it.

India and the Philippines made the same bet twenty-five years ago. They built outsourcing industries that became pillars of their economies. And now they are watching artificial intelligence erode the foundations that made those industries valuable.

No one is immune from disruption

This isn’t a question about which country faces more disruption — both do, and anyone who tells you otherwise is selling something.

The same anxiety present in Philippine boardrooms is present in Bengaluru and Mumbai. India’s IT-BPM industry is already seeing AI tools absorbing routine customer-service and data-management work, with BPM hiring slowing as companies push toward automation.1 Analysts have flagged that AI could compress parts of the labor-heavy application-services model that made Indian IT so large.2

In 2024, the head of TCS told the Financial Times that AI could reduce the need for call centers to “minimal” levels — a striking statement from the chief executive of India’s largest IT firm.3 And TCS leadership has since said publicly that the company is pushing staff to use AI even though it carries risks to near-term revenue.4

The disruption is not theoretical. In March 2026, Nokia announced fresh layoffs in its India operations — up to 20 percent of a 17,700-person workforce — as part of a global restructuring explicitly designed to “align with emerging AI-driven demand.” The decision was made in Finland. Rival Ericsson is running a parallel cut of roughly 5,000 jobs globally.5 Indian workers at Nokia have no more say in that decision than Philippine workers at Concentrix have in decisions made in Charlotte.

Clearly, India is under real pressure from the same forces.

The question we should be asking is this: which country has the institutional machinery to convert that disruption into domestic gains?

India built domestic champions

The difference between India and the Philippines is ownership.

TCS, Infosys, Wipro — these are not foreign firms operating in India. They are Indian firms with Indian capital structures, Indian leadership, and Indian shareholders. When they automate a customer-service operation, the productivity gain does not leave the country. It gets reinvested in R&D, in new service lines, in the next generation of workers. The decisions get made by people whose careers and capital are staked on getting it right for Indian institutions.

The scale of what that means is visible in what TCS is actually doing with its size. In its most recent quarter, the company reported that more than 217,000 of its employees (roughly one in three employees) had acquired advanced AI skills, not as a defensive gesture, but as the foundation of a new service line. Annualized AI services revenue has already reached $1.8 billion.67

TCS is not protecting a headcount model. It is converting one. And the gains from that conversion — the new revenue, the retrained workforce, the reinvested margin — stay inside a wholly Indian institution. Infosys and Wipro are running the same play at comparable scale.89

Consider the contrast with Nokia’s India layoffs: Nokia India’s entire workforce of 17,700 is smaller than what a single Indian champion like TCS redeploys in a quarter. When Nokia cuts, those workers have domestic institutions to land at — firms with the scale and mandate to absorb and retrain. That is what ownership buys.

In the Philippines, there is no firm in this position. The $40 billion IT-BPM sector is almost entirely controlled by Accenture, Teleperformance, Concentrix, and their peers.10 When those firms automate Philippine operations, the employment adjustment lands here. The productivity gains accrue to foreign shareholders. The reskilling investment, if it happens at all, happens at the discretion of a headquarters on foreign soil. The Philippines is not at the table when those decisions are made.

The policy gap

India’s government reinforces the structural advantage its firms provide. In 2024, India approved the IndiaAI Mission with a five-year budget of roughly $1.25 billion (₹10,372 crore) and a compute facility that has since grown from 10,000 to 38,000 GPUs. They have publicly backed infrastructure for building foundational AI models on Indian data, and FutureSkills PRIME, a joint government-industry digital reskilling program, already has more than 1.85 million workers enrolled and over 337,000 course completions.111213

What does 38,000 GPUs of publicly backed compute mean in practice? It means Indian researchers and firms can train and fine-tune large models without routing that work through foreign cloud providers. It means the intellectual property from that research stays domestic — and it empowers India to build toward a position where it can own more of the AI stack.

Contrast this with the Philippines’ flagship reskilling program for IT-BPM, Project UNLAD. It carries a four-year budget of roughly $13 million (₱740 million), which works out to about $1.70 per IT-BPM worker per year in dedicated government transition funding.14

That gap — $1.25 billion against $13 million, 38,000 GPUs against none — is not merely a difference in scale. It is a difference in what the two governments believe the moment requires. One country is building compute infrastructure, funding foundational model development, and running a reskilling program that has already reached hundreds of thousands of workers. The other is running a pilot.

Capability is not control

This is not meant to be an indictment of the Philippines. The IT-BPM workforce that this country built over twenty-five years has deep, genuine expertise in customer operations, compliance workflows, healthcare support, and multilingual service environments. As I argued in “From Rented Labor to Owned Capability,” those are genuine assets.

But there is a distinction that the next phase of this transition will make brutally clear: capability is not the same thing as control.

India’s advantage is not that its workers are more capable than Filipino workers. In many domains they are not. India’s advantage is that when AI compresses the economics of routine service work, it has firms with the scale, the balance sheets, and the domestic mandate to pivot and move up the value chain. The Philippines has workers who can do the work, but it has not built enough institutions that own the work.

This is the ownership question at the heart of the series.

The Philippine model was rational for its moment.15 But a model built around supplying labor to other people’s firms is weaker precisely when the value starts moving away from labor and toward software, workflow control, and retained intellectual property.

India shows what it looks like when a country has more of its own institutions in the game when the game changes. It does not show that the transition is easy, but that ownership = agency.

Moving away from tenancy

The Philippines needs to be honest that the difference between hosting an industry and owning one is its central vulnerability — and that the policy responses currently on the table are sized for a different, smaller problem.

The India comparison illustrates how far there is still to go.

The question the next pieces in this series will turn to is the tenancy structure itself — the $40 billion sector that the Philippines hosts but does not own — and what it would take to move away from it.

Footnotes

  1. Reuters, “Meet the AI chatbots replacing India’s call-center workers,” October 15, 2025. https://www.reuters.com/world/india/meet-ai-chatbots-replacing-indias-call-center-workers-2025-10-15/ ↩

  2. Reuters, “Anthropic’s AI push raises analyst concerns over Indian IT services revenues,” February 5, 2026. https://www.reuters.com/world/india/anthropics-ai-push-raises-analyst-concerns-over-it-services-revenues-2026-02-05/ ↩

  3. Financial Times, “AI could kill off most call centres, says Tata Consultancy Services head,” April 25, 2024. https://www.ft.com/content/149681f0-ea71-42b0-b85b-86073354fb73 ↩

  4. Reuters, “India’s TCS urging staff to use AI despite risk to revenue, CEO says,” February 25, 2026. https://www.reuters.com/world/india/indias-tcs-urging-staff-use-ai-despite-risk-revenue-ceo-says-2026-02-25/ ↩

  5. Moneycontrol, “Nokia plans fresh layoffs in India amid global restructuring; Samar Mittal elevated,” March 27, 2026. https://www.moneycontrol.com/news/business/nokia-plans-fresh-layoffs-in-india-amid-global-restructuring-samar-mittal-elevated-13872214.html ↩

  6. Tata Consultancy Services, FY25 annual results. https://www.tcs.com/who-we-are/newsroom/press-release/tcs-financial-results-q4-fy-2025 ↩

  7. Tata Consultancy Services, FY26 Q3 results. https://www.tcs.com/who-we-are/newsroom/press-release/tcs-financial-results-q3-fy-2026 ↩

  8. Infosys, “Three Year Overview (IFRS) — Employee Data.” https://www.infosys.com/investors/reports-filings/financials/employee-data.html ↩

  9. Wipro, “Results for the Quarter and Year ended March 31, 2025 — Datasheet.” https://www.wipro.com/content/dam/nexus/en/investor/quarterly-results/2024-2025/q4fy25/datasheet-q4fy25.pdf ↩

  10. Bernd-Michael Rennebeck, “From Rented Labor to Owned Capability,” March 6, 2026. https://blog.brennebeck.com/posts/from-rented-labor-to-owned-capability/ ↩

  11. IndiaAI, “Cabinet approves India AI mission at an outlay of Rs 10,372 crore,” March 12, 2024. https://indiaai.gov.in/news/cabinet-approves-india-ai-mission-at-an-outlay-of-rs-10-372-crore ↩

  12. Press Information Bureau, Government of India, January 30, 2025. https://www.pib.gov.in/PressReleasePage.aspx?PRID=2097709 ↩

  13. Press Information Bureau, Government of India, “Transforming India with AI,” October 12, 2025. https://www.pib.gov.in/PressReleasePage.aspx?PRID=2178092 ↩

  14. Philippine News Agency, “IT-BPM exec optimistic of sector’s growth amid challenges,” 2026. https://www.pna.gov.ph/articles/1267882 ↩

  15. ASEAN+3 Macroeconomic Research Office (AMRO), “Can the Philippines’ IT-BPM Industry Stay Ahead Amid the AI Wave?” December 10, 2025. https://amro-asia.org/can-the-philippines-it-bpm-industry-stay-ahead-amid-the-ai-wave/ ↩