- Over 600 IT outsourcing deals set to expire by December
- Renewals come amid tariffs, layoffs, and muted industry growth
- Major clients include Daimler, Ericsson, Petrobras, and Nielsen
Large-scale renewals on the horizon
Indian IT service providers are preparing for a critical period as contracts worth $13 billion (about ₹114,400 crore) come up for renewal in the second half of 2025. Research by Everest Group indicates that more than 600 agreements are set to expire, with deal sizes ranging from $20 million to over $2 billion.
The country’s largest IT firms, including TCS, Infosys, HCLTech, and Wipro, face renewals with key international clients such as Daimler AG, GE Appliances, Ericsson, Petrobras, and Star Alliance.
Global headwinds add pressure
The contract renewals come at a challenging time for the sector. The IT industry has struggled with low single-digit growth for a second consecutive year, reflecting the impact of global economic slowdown and trade uncertainty.
US tariffs have weighed heavily on manufacturing and retail sectors, two major industries served by Indian IT providers. Reports of potential restrictions on outsourcing from the US have further heightened concerns for firms that derive a large share of revenue from the American market.
Industry response to slow growth
In response to weak demand, major players have taken cost-cutting measures. Earlier this year, TCS announced plans to reduce its workforce by 12,000 employees, amounting to 2 per cent of its global headcount. Other firms have paused salary hikes and scaled back hiring as they prepare for subdued client spending.
Despite these challenges, the upcoming renewals represent both risk and opportunity. Retaining large contracts is crucial for revenue stability, but pricing pressures and tighter client budgets may weigh on margins.
Why this matters for businesses
For enterprises relying on Indian IT providers, the renewal wave could lead to changes in service pricing and delivery models. Organisations negotiating new terms may seek greater cost efficiency, stronger digital transformation support, and assurance on resilience in uncertain economic conditions.
The scale of these deals means their outcomes will set the tone for India’s IT sector in 2026. Businesses dependent on these providers should monitor developments closely, as contract renegotiations could affect service continuity and cost structures.
