New Delhi, Aug. 3 -- For nearly a decade, HCLTech has been a key partner managing a significant share of Google's application development and engineering operations. That long-standing engagement, however, is now being scaled back.

According to media reports, Google has reduced the size of its outsourcing contract with HCLTech by about $50 million annually as part of a broader strategy to consolidate vendors and expand the use of automation. While the financial impact on HCLTech is expected to be modest, the decision highlights a larger trend confronting India's $315-billion IT services industry: even long-term outsourcing relationships are no longer immune in the age of artificial intelligence.

Reports indicate that the original contra...