India’s IT Spending Forecast to Hit $124.6 bn, Led by AI and Digital Transformation

Gartner’s forecast predicts a significant surge in India’s IT spending, projected to reach $124.6 billion in 2024, marking a robust increase of 10.7 percent from the preceding year.

IT spending in India dropped 0.5 percent to $112.554 billion in 2023. In 2022, IT spending in India grew 5.5 percent to $113.063 billion.

In 2024, the distribution of IT spending in India across different sectors will be as follows:

Data Center Systems: $4.121 billion (+9.4 percent)

Devices: $51 billion (+10.1 percent)

Software: $17.689 billion (+18.5 percent)

IT Services: $26.651 billion (+14.6 percent)

Communication Services: $25.148 billion (+3.5 percent)

India IT spending growth in 2024 Gartner reportThe rise in IT investments is anticipated to be propelled by a strategic focus on artificial intelligence (AI) and generative AI (GenAI). However, the full impact of these investments on IT spending levels is anticipated to materialize notably from 2025 onward. Naveen Mishra, VP and Team Manager at Gartner, highlighted that GenAI’s contribution to IT spending will remain relatively modest until 2024.

Indian organizations are gearing up to invest in AI and automation as part of their strategic endeavors aimed at enhancing operational efficiency and addressing the persisting shortage of IT talent. It’s envisioned that GenAI will begin to carve a significant niche in IT budgeting among Indian organizations starting in 2025,” Naveen Mishra said.

At the ongoing Gartner IT Symposium/Xpo, analysts are discussing trends shaping the Indian IT market, emphasizing the profound impact of digital priorities on software and IT services spending.

The accelerated adoption of digital technologies, including AI, machine learning, and secure access service edge (SASE), is expected to drive a notable uptick in cloud service implementation. Consequently, this trend is poised to fuel growth in both software and IT services. Naveen Mishra underscored that the lack of internal skills within Indian businesses will further contribute to the uptick in IT services spending projected for 2024.

Forecasts suggest that software spending will witness a substantial increase of 18.5 percent, while IT services are anticipated to experience robust growth, projected at 14.6 percent in 2024. These segments are expected to demonstrate the highest annual growth rates, reflecting the significant emphasis on digital transformation initiatives and technological modernization across Indian enterprises.

The surge in IT spending underscores a strategic shift as organizations prioritize technological advancements and digital resilience to navigate evolving market landscapes and competitive pressures. As the technological landscape evolves, India’s IT sector is poised for a transformational phase marked by increased reliance on AI-driven solutions and amplified digital innovation.

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