The Indian domestic IT & Business Services market recorded 7.2 percent growth in 2021 to $14.15 billion vs 5.3 percent in 2020, according to IDC.
The increase in growth rate is due to rise in digital transformation initiatives among enterprises in the country.
“Cloud, AI/ML, and security continue to be priority investment areas, and businesses also increased their investments in workplace transformation projects due to adoption of hybrid work models,” said Harish Krishnakumar, Senior Market Analyst, IT Services, IDC India.
Of the IT & Business Services market, the IT Services market contributed 77.6 percent and grew by 7.9 percent in 2021 compared to the 5.8 percent growth in 2020.
The IT & Business Services market is projected to grow at a CAGR of 8.9 percent between 2021-2026 and reach $21.67 billion by the end of 2026 as enterprises CIO will invest in areas like cloud, AI/ML, security, application modernization, etc.
IDC classifies the IT & Business Services market into three primary markets – Project-Oriented, Managed Services, and Support Services. For 2021, Project-Oriented services registered the highest growth rate at 7.9 percent, followed by Managed Services at 6.9 percent, and Support Services at 6.2 percent respectively.
“Areas like cloud and security continued to see momentum along with automation and AI. We see this trend continuing as Indian enterprises will look up to their service providers as they progress towards their goal of becoming a future-enterprise,” said Sharath Srinivasamurthy, Research Director, Enterprise Solutions & ICT Practices, IDC India.