Artificial intelligence is quietly rewriting how India’s IT services industry signs contracts. Clients are increasingly demanding AI-driven productivity gains as a default clause, asking vendors to deliver more output for lower billing, according to industry watchers.

The pricing squeeze

Longer decision cycles, lower discretionary spending, and vendor consolidation have already pressured pricing. AI clauses add a new dimension: customers assume automation will cut effort, and want the savings shared upfront.

How vendors respond

Large providers are responding with AI platforms of their own, promising faster delivery and fewer defects. The bet is that automation absorbs the price cuts while opening higher-value advisory work around data and model deployment.

Jobs question

The shift raises fresh questions about entry-level hiring, even as industry voices argue India’s tech sector has weathered such transitions before. The next two quarters of deal wins will show who adapts fastest.