Fonterra is shaping up to replace its Kiwi tech services provider with one of two India-based outsourcers, an industry insider tells the Herald.

The dairy co-operative has been using NZ's Datacom and the multinational DXC for information technology services.

Both have been "shown the door", the source says.

Instead, Fonterra has settled on two India-based offshoring specialists as the finalists for a new "all-of-IT" outsourcing contract: Tata Consulting Services and HCL (Hindustan Computers Limited).

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"I am sure their shareholders will be very impressed that this move will take even more jobs from the NZ IT sector," the source says. "It

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