BENGALURU, Dec 19 India39;s information technology firms are accepting tougher contract terms to win large deals from clients as they compete for fewer orders in an uncertain global economy, industry insiders and analysts say.

The 245billion sector, which gained immensely from the pandemicinduced boom in digital services, has struggled in recent quarters as clients slashed spending on discretionary projects amid inflationary pressures and recession fears.

That is forcing companies including Tata Consultancy Services, Infosys and HCLTech to accept contract conditions such as guaranteeing minimum cost savings, billing the client only if certain goals are achieved and reviewing cost overruns.

Whenever economic challenges appear and demand recedes, it becomes a buyer39;s market. The clients try to push more clauses including capping the pricing and asking for outcomebased deals, said former Infosys CFO V Balakrishnan.

It was witnessed during 2008 when the global financial crisis happened, and in 2001 during the dotcom crash, he said.

Tata Consultancy Services and Infosys did not respond to Reuters39; requests seeking comment. HCLTech declined to comment on specific deal terms.

More than 80 of more than 1,600 IT and business process management deals tracked in 2023 had some form of committedsavings clause, versus around 65 in 2019, data from IT research firm Everest Group showed.

Such costsaving clauses are either baked into the pricing, or companies risk a cut in…