As almost outsourcing contracts worth $15 billion are up for renewal this year, the Indian IT major are witnessing a tough competition from global MNCs. In fact, there are around 422 contracts worth a mind-boggling $15 billion that will be up for renewal this year but the companies like Tata Consultancy Services (TCS), Infosys and Wipro among other IT firms are also taking part in the race.

However, as India has lost its low cost advantage over the years and are now facing competition from multinationals which have a lower operating margin expectation and thus greater flexibility to offer discounts. Companies like IBM, Accenture, and Capgemini are some names out of the lot that are eying the contracts along with host of the other competitors.

Notably, the operating margin of Indian IT majors like TCS, Infosys and Wipro is as high as 15-17% but when one compares to the 11-13% of IBM and Accenture, it is clear that the global giants have an edge over the Indian counterparts.

In fact, even the clients have agreed to pay a premium on the more on-site presence leaving the Indian IT majors on the losing side and hence making the competition more intense.