Artificial intelligence is reshaping contracts across India’s $315 billion IT services industry. Outsourcing giants including TCS, Infosys, Wipro, HCLTech and Cognizant are moving from billing by hours worked to fees tied to performance outcomes. Clients are demanding steep price cuts and higher productivity as AI tools deliver efficiency gains. Some work is shifting in-house, contracts are getting shorter, and large employee bases no longer guarantee wins. TCS says about 80 percent of contracts in its finance, HR and related business services are now outcome-based, roughly double the share since late 2023. Persistent Systems reports clients seeking the same work for 25 to 30 percent less money while expecting faster delivery. Mid-sized firms such as Persistent and Coforge have posted stronger growth than the largest players. The Nifty IT index has fallen about a fifth this year, with its constituents losing a combined $73 billion in market value.
Artificial intelligence is reshaping contracts across India’s $315 billion IT services industry. Outsourcing giants including TCS, Infosys, Wipro, HCLTech and Cognizant are moving from billing by hours worked to fees tied to performance outcomes. Clients are demanding steep price cuts and higher productivity as AI tools deliver efficiency gains. Some work is shifting in-house, contracts are getting shorter, and large employee bases no longer guarantee wins. TCS says about 80 percent of contracts in its finance, HR and related business services are now outcome-based, roughly double the share since late 2023. Persistent Systems reports clients seeking the same work for 25 to 30 percent less money while expecting faster delivery. Mid-sized firms such as Persistent and Coforge have posted stronger growth than the largest players. The Nifty IT index has fallen about a fifth this year, with its constituents losing a combined $73 billion in market value.