Amid lurking recession and limited spending by clients, India’s $245bn IT sector accepts tougher contracts

Bengaluru: India’s information technology (IT) firms are accepting tougher contract terms to win large deals from clients as they compete for fewer orders in an uncertain global economy, industry insiders and analysts say.

The $245-billion sector, which gained immensely from the pandemic-induced boom in digital services, has struggled in recent quarters as clients slashed spending on discretionary projects amid inflationary pressures and recession fears.

That is forcing companies including Tata Consultancy Services, Infosys and HCLTech to accept contract conditions such as guaranteeing minimum cost savings, billing the client only if certain goals are achieved and reviewing cost overruns.