India's software exporters are rapidly losing influence on the domestic stock market as artificial intelligence disruption triggers sustained selling pressure. The combined market weight of five major IT companies in the NSE Nifty 50 Index has fallen below 7.6%, marking the lowest level since at least 2002, according to Bloomberg data.

At their peak over two decades ago, these same IT companies commanded more than a fifth of the benchmark index. Today's decline reflects investor anxiety about how AI technologies could reshape traditional software services, threatening the business model that once made these firms market darlings.

The selloff underscores a dramatic shift in market sentiment toward India's technology sector. Foreign investors and domestic institutions alike are reassessing the long-term viability of outsourced software development as automation and AI capabilities advance globally.

This erosion signals that India's IT industry faces its most significant structural challenge in decades, with market leadership potentially migrating to firms better positioned for the AI economy.