The Indian IT & Business Services market continued its upward trajectory in the first half of 2023, reaching a valuation of $7.14 billion and recording a 6.3 percent year-over-year (YoY) growth.
While this growth rate in Indian IT & Business Services market indicates a slight deceleration compared to the 7.4 percent increase witnessed in the same period of 2022, the market’s resilience in the face of macroeconomic headwinds remains noteworthy, IDC said.
The deceleration in growth in the Indian IT & Business Services market can be attributed to a restrained approach towards IT spending among Indian enterprises, driven by prevailing macroeconomic challenges. Despite these constraints, Indian enterprises strategically directed their investments towards critical IT projects aimed at accelerating time-to-value in key focus areas. These endeavors primarily focused on bolstering customer experience, fortifying cybersecurity measures, and optimizing IT infrastructure and operations.
Although cautious in their near-term IT service investments due to macroeconomic uncertainties, Indian enterprises remain poised to channelize their investments in the coming years towards transformative technologies such as cloud computing, cybersecurity solutions, and emerging innovations like Generative AI and 5G.
Within the IT & Business Services market, IT Services accounted for a significant 78.9 percent contribution and experienced a growth rate of 6.7 percent during 1H2023, slightly down from the 8.1 percent growth observed in the corresponding period of 2022. Projections indicate a promising trajectory, forecasting a Compound Annual Growth Rate (CAGR) of 7.2 percent between 2022-2027, envisioning the market to escalate to a value of US$19.59 billion by the end of 2027.
IDC’s segmentation of the IT & Business Services market into three primary categories—Project-Oriented, Managed Services, and Support Services—reveals distinctive growth patterns. Notably, project-oriented services took the lead in growth rate during 1H2023, recording a commendable 6.9 percent surge. This was closely followed by managed services, which registered a growth rate of 6.0 percent, while support services exhibited a growth rate of 5.3 percent.
“Indian organizations are strategically forging partnerships with third-party IT vendors to optimize the agility and efficiency of their infrastructure and application cloud management. They are embracing the integration of AI and Generative AI into their operational frameworks to enhance efficiency notably in customer experience, code generation, and knowledge management,” Neha Gupta, Senior Research Manager, Software and IT Services Market, IDC India, said.