IT Deal Renewals: TCS, Infosys, and Wipro Compete for Major $13 Billion Contracts
Indian IT companies are gearing up for a significant wave of contract renewals, with an estimated value of around $13 billion expected by the end of December. Major players such as Tata Consultancy Services (TCS), Infosys, HCLTech, and Wipro are poised to capitalize on this opportunity as clients increasingly seek cost savings and AI-driven efficiencies. Research indicates that the total value of deal renewals this year could exceed the $14 billion recorded in 2024, marking a pivotal moment for the industry.
Contract Renewals and Market Dynamics
The Indian software export sector, valued at $283 billion, is witnessing a surge in contract renewals. More than 600 contracts are set to be renewed in the latter half of 2025, with values ranging from $20 million to over $1 billion, and some even exceeding $2 billion. According to the Everest Group, large deals typically start at $100 million, while mega deals surpass $500 million. This trend reflects a growing demand for substantial contracts as companies look to optimize their IT expenditures.
Major contracts in this renewal wave include TCS’s partnerships with Star Alliance and Nielsen, Infosys’s agreements with Daimler AG and GE Appliances, HCLTech’s collaborations with Ericsson and UK insurer Chesnara, and Wipro’s deals with German utility E.ON, Finland’s Fortum, and Brazil’s Petrobras. Recently, TCS secured a $640 million order from Danish insurer Tryg, marking its first major deal since January 2024. Wipro also renewed a two-year contract with European food wholesaler Metro, extending a previous partnership.
Impact of AI and Market Trends
The tech research firm ISG anticipates over 800 renewals, particularly from the financial services and manufacturing sectors, with mega deals valued at approximately $1.7 billion. In the first half of 2025, around $1.3 billion in mega deals are already in the renewal pipeline, representing about 70% of global IT deal activity. Namratha Dharshan, chief business leader at ISG, noted that the number of contracts with annual values exceeding $100 million has been increasing over the past two years, indicating robust large deal activity.
Dharshan emphasized that the current macroeconomic environment supports the creation of new mega awards, suggesting that large deal activity will remain strong in 2025. Enterprises are focused on cost reduction, while service providers are keen on shaping large deals. However, she pointed out that while big deals are gaining traction, the sizes of contracts in the business process outsourcing (BPO) sector are generally decreasing, reflecting cautious discretionary spending amid ongoing economic challenges.
Challenges and Future Outlook
Despite the positive outlook for large contracts, the Indian IT sector faces challenges due to a slowdown in global tech demand, exacerbated by the US-led tariff war. This situation has prompted clients to seek discounts during renewals and demand AI-led benefits. Yugal Joshi, a partner at Everest Group, highlighted that AI is now a crucial factor in determining which companies win contracts, a shift from the past when incumbents secured around 90% of renewals.
Joshi noted that the average deal sizes have dipped slightly below $100 million, contrasting with the previous year when over 700 deals were typically larger. He expressed concerns about the emergence of irrational deal constructs, particularly regarding task automation driven by AI agents in the market. As the landscape evolves, it remains uncertain whether all providers will meet the intended delivery objectives.
Observer Voice is the one stop site for National, International news, Sports, Editor’s Choice, Art/culture contents, Quotes and much more. We also cover historical contents. Historical contents includes World History, Indian History, and what happened today. The website also covers Entertainment across the India and World.
