IT grappling with cost pressures as pricing shifts from effort to outcomes

India’s information technology services industry is facing heightened cost pressures on account of a fundamental shift in its pricing models, especially triggered by the productivity boost from artificial intelligence (AI), said industry executives and experts.

The industry, which is estimated to have clocked revenue of about Rs 24.3 lakh crore ($283 billion) in 2024-25, is moving towards outcome-based pricing models, they said.

With generative AI and Agentic AI boosting productivity by 20-40%, leading to swifter outcomes at lower costs, clients are…