Multinational companies took the wind out of the sails for most IT companies's ability to hire talent.
Around 2008, there was a peak boom in offshore centers set up by most companies. These companies could afford to pay well because most of their revenue is either ad revenue or from companies like Microsoft which had a great sales pipeline going. These companies around 2014 - 2015 started to cut down heavily on offshore hiring, the reason was salaries were bonkers and most managers overpaid certain employees by several factors higher than others(Thanks to insane stock packages). The salary levels for many employees were on par with US salaries. Once you reach that point, it makes sense to hire people in US than in Bangalore. This plateau effected product based multinational companies more than services companies.
Another factor that has played into this whole thing is the number of H1B's and Green cards currently staying in US. The L1 A and EB-1 program was abused by most companies(ironically product companies) to award GCs in wholesale. As of now the peak services company head count around 2008 is now entirely working in the US. Of course if you have all the cheap labor you want in your home country, you don't outsource much to India.
The actual services company industry is going at the same pace as before. They are quite fiscally responsible companies so don't pay 4x higher as product companies do, they are perennially profitable though. Infosys is one of the most successful tech companies in the history of India ever. In fact the product company salaries are the biggest reason many fresher in the past few years have opted to be SREs/DBAs/PEs/QEs(non-dev roles) etc in product companies than be programmers in service companies. The irony today is people from small time colleges get to work a lot of good dev projects in service companies than people from top colleges who work on non-dev projects.
The third factor of course is homegrown start up ecosystem. Start ups in India payed quite well around 2014 when VC money was free and plenty. I guess they don't pay that well now. And they are also quite stingy with equity. Plus I hear they are bad with tech work too. Most of it is Spring + Java + Postgres stitching.
I remember in the peak of service companies I did far more quality work than any start up kid does today.
May be the next US recession will change things again. But like I said before, people are now used to MNC salaries and suffer through any bad project for just the salary.