After the Reset: Indian IT Services on the Other Side of the Rate Card

Five predictions about Indian IT services by the end of 2028, each stated specifically enough to be graded later, and each paired with the evidence that would prove it wrong. Predictions without a falsifier are press releases, so this edition closes by attaching one to each.

1. Outcome-linked work passes a quarter of industry revenue

The call. By the end of 2028, non-effort-based pricing — outcome-linked, gain-share, consumption and credit models combined — will exceed 25% of revenue across the listed Indian IT services sector, up from low single digits at most firms today.

The reasoning. The trajectory already exists at firms that moved early. ExlService reports outcome-based arrangements at roughly 36% of revenue with a stated target in the mid-40s within three to five years. Genpact sits near 24%. Cognizant has around 45% of BPO contracts on outcome models. Roughly 80% of TCS contracts in its finance, HR and business-services segment now carry outcome performance measures, double the level of late 2023. When the largest providers move a segment that far in two years, the industry average follows.

What would prove it wrong. A sustained failure of measurement infrastructure. If disputes over baselines and attribution become common enough that large clients revert to fixed-price contracting for risk reasons, adoption stalls well below this level. Watch for the first significant public arbitration over an outcome contract.

2. The mid-market growth premium narrows but does not close

The call. Mid-tier Indian providers will continue to outgrow the largest firms through 2028, but the gap will compress from roughly ten-to-one to something closer to two-to-one.

The reasoning. The 2026 gap was extreme: Persistent grew 16% and Coforge 33% in the second quarter against 1–3% at TCS, Infosys, Wipro and HCLTech. That advantage comes from agility in repricing and delivery redesign, and it is a transition advantage rather than a permanent one. Large firms are moving, slowly, and each segment they convert removes part of the gap. The premium persists because structural agility persists; it narrows because the specific transition ends.

What would prove it wrong. A wave of large-firm acquisitions of exactly these mid-tier assets, which would convert the growth into the acquirers' numbers and eliminate the comparison. The Capgemini–WNS transaction in October 2025, at 11.2 times EBITDA and framed around agentic AI-powered operations, is the shape of what that would look like.

3. Consolidation removes firms that could not reprice

The call. A meaningful number of Indian services firms in the 500-to-5,000 employee range will be acquired, merged or wound down by end-2028, and the distinguishing characteristic of those that exit will be commercial model rather than technical capability.

The reasoning. The squeeze is specific to this size band. These firms are too large to operate as boutique specialists and too small to absorb the investment that outcome delivery requires: measurement infrastructure, balance sheet capacity for deferred contracts, and commercial design capability. Ten Nifty IT constituents lost a combined $73 billion in market value across 2026 while the index fell 20%, and the valuation reset changes the arithmetic of both buying and selling.

What would prove it wrong. A broad recovery in discretionary technology spending that lifts revenue across the size band before the commercial transition is forced. Demand has been the cushion in previous downturns and could be again.

4. Utilisation stops being the primary delivery metric

The call. By 2028, most mid-sized Indian providers will report internally on a cost-to-outcome measure alongside or instead of utilisation, and permanent headcount as a share of delivery capacity will fall materially.

The reasoning. The metric follows the revenue model. Utilisation answers what proportion of employed people are billing, which matters when billing is by person and matters progressively less when it is not. Firms pricing on outcomes need to know the cost of delivering one unit of the contracted result, and that number cannot be derived from utilisation reporting. The shift in cost structure follows for the same reason: variable revenue against fixed cost is not sustainable at scale.

What would prove it wrong. Persistence of hybrid portfolios in which time-and-materials remains the majority of revenue for long enough that firms reasonably keep running the old metric as the primary one.

5. The scarcity moves rather than disappearing

The call. Demand for narrow, current, deployable specialist capability will remain tight through 2028 even as generic engineering capacity becomes abundant, and the entry-level pipeline will not recover to 2019 levels.

The reasoning. Entry-level technology hiring is down roughly 65% at the largest employers and 76% at early-stage companies against 2019, according to SignalFire's 2026 talent research. Analysis of India's GCC sector finds AI displacement concentrated specifically among entry-level roles. Meanwhile outcome contracts require people who have actually delivered the thing being priced, available inside a contractual window — a much narrower requirement than "a competent engineer."

What would prove it wrong. A structural response at scale: government or industry apprenticeship programmes that rebuild the first rung, or a shift in AI capability that makes senior judgement itself cheaply substitutable. Neither looks likely inside three years, but both are observable if they begin.

What none of this settles

Three things remain genuinely open, and honest forecasting should say so.

Whether outcome pricing is structurally more profitable than time and materials at industry scale is unproven. Genpact attributes around 300 basis points of gross-margin expansion to agentic solutions, which is encouraging and is one firm.

Whether clients maintain appetite for shared risk through a downturn is untested. Risk-sharing is popular when buyers feel confident; procurement behaviour in a recession may look different.

And whether the mid-market's agility advantage survives contact with the capital requirements of outcome delivery is the central question for the readership of this magazine. Agility helps a firm reprice. It does not by itself fund a year of deferred revenue.

Next October's edition opens by grading these five.