Som Mittal, head of IT industry body Nasscom, expects India’s IT outsourcing companies to deliver double-digit growth by the end of the year. Mittal is forecasting that revenues from the sector will rise at least 15 per cent to about $70bn this year as banking and corporate customers in the US and Europe resume spending following a slowdown in growth during the global economic downturn.

However, despite the projected growth, Mr Mittal admits that India’s traditional IT outsourcing model is experiencing a fundamental shift as it adapts to the post-economic crisis environment. “We’ve now moved to an outcome-based model” – being paid on performance, rather than one based solely on the number of people deployed on any one job, he says. “That is giving outsourcers an incentive to be more efficient.”

According to Bindi Bhullar, director of Global IT services firm HCL Technologies: “One interesting trend is that buyers are becoming more sophisticated in their purchasing of IT services, looking for more outcome based pricing models.

“As a result, the frequency with which executives approve major consulting deals casually during a round of golf is diminishing. Instead, several developing trends are shaping client expectations for the client-consultant relationship. These trends include more centralised purchasing, better information sharing among clients and higher skilled IT workers.”

Meanwhile, analysts say that above-average wage rises in India’s IT outsourcing industry could become a concern. Arup Roy, a principal analyst at consultancy Gartner, says wages have risen about 15 per cent a year.

Mr Roy says that for many international companies, the key reason to outsource some technology functions to India is price. But he says that, while India still remains a low-cost destination, that advantage is “depleting with every passing year”.

Indian IT outsourcers are still expected to see a 10 to 15 per cent rise in quarter-on-quarter growth, he says. “The problem is that investors have got used to growth of 20-25 per cent. Investors will have to reset their expectations.”