{
  "id": 2291581,
  "title": "AI reshapes India's IT services sector contracts as clients demand more for less",
  "url": "https://urgent.news/2026/08/21/ai-reshapes-indias-it-services-sector-contracts-as-clients-demand",
  "topic": "ai",
  "section": "AI",
  "published": "2026-08-21T02:54:06.000Z",
  "source": {
    "name": "Economic Times Tech",
    "slug": "economic-times-tech",
    "url": "https://economictimes.indiatimes.com/tech/artificial-intelligence/ai-reshapes-indias-it-services-sector-contracts-as-clients-demand-more-for-less/articleshow/133391316.cms"
  },
  "original_language": "en",
  "account": "Artificial intelligence is transforming India's IT services sector, forcing companies to rethink their business models. Outsourcing giants, including Tata Consultancy Services, Infosys, and Wipro, are shifting fees to performance outcomes instead of the traditional hourly rates. Clients are demanding steeper price cuts and increased productivity, leading to shorter contracts and even loss of work as AI enables tasks to be performed in-house. This new landscape is leveling the playing field for smaller rivals, who are capitalizing on the opportunity to snatch business from the big IT companies. The odds are heavily in favor of clients, according to Jimit Arora, CEO of Everest Group.\n\nThe traditional reliance on billable hours is no longer advantageous for IT companies, as AI automates more tasks and levels the competitive field. The Nifty IT index has dropped by a fifth this year, with a combined loss of $73 billion in market value for the sector's 10 constituents. Pricing for contracts is now dictated by performance outcomes, with about 80% of TCS's contracts within its finance, human resources, and other business services segment based on outcome performance measures. This 80% figure represents a doubling since the widespread adoption of AI in late 2023, according to a source familiar with the matter.\n\nAI is driving productivity gains, leading clients to demand the same work for 25% to 30% less while expecting faster delivery and higher productivity. Persistent Software CEO Sandeep Kalra reported clients demanding 25% to 30% less for the same work, with faster delivery and higher productivity expected. Some IT firms are even foregoing upfront payments for the first year in multiyear deals, with payments tied to efficiency gains and specific business outcomes. Clients now expect more value and measurable outcomes, prompting firms to restructure their models to meet these demands.",
  "summary": "Industry executives also say they are losing some work entirely as customers use AI to shift tasks in-house, while all the uncertainty that the new technology has brought is resulting in shorter contracts.",
  "key_points": [],
  "editors_take": null,
  "illustration": null,
  "coverage": {
    "outlets": 3,
    "also_reported_by": [
      {
        "outlet": "Channel News Asia",
        "title": "AI reshapes India's IT services sector contracts as clients demand more for less",
        "url": "https://urgent.news/2026/08/20/ai-reshapes-indias-it-services-sector-contracts-as-clients-demand",
        "published": "2026-08-20T23:02:47.000Z"
      },
      {
        "outlet": "The Hindu",
        "title": "AI reshapes India's IT services sector contracts as clients demand more for less",
        "url": "https://urgent.news/2026/08/21/ai-reshapes-indias-it-services-sector-contracts-as-clients-demand-2293622",
        "published": "2026-08-21T03:57:15.000Z"
      }
    ]
  },
  "ai_generated": true,
  "disclaimer": "Summaries, key points and the editor’s take are written by software from other outlets’ reporting and may contain errors — always check the linked original."
}