India’s domestic IT and Business Services market reached USD 16.5 billion in 2024, reflecting a 6.9 percent growth, according to IDC’s Worldwide Semi-annual Services Tracker. This marks a slowdown from the 7.3 percent growth India achieved in the IT services spending in 2023.
Growth Drivers and Focus Areas
Despite cautious sentiment in enterprise spending, Indian firms are steadily investing in strategic digital transformation initiatives. Priorities include application modernization, cloud migration, cybersecurity enhancements, and adoption of emerging technologies such as generative AI (GenAI), Harish Krishnakumar, senior market analyst, IT Services, IDC India, said in the report.
The IT Services segment, which makes up 75.7 percent of the total market, grew by 7.2 percent in 2024. Within this:
Managed Services led with a 7.4 percent growth, buoyed by demand for hosting infrastructure and application management solutions.
Project-Oriented Services followed with a 6.9 percent rise, supported by increased enterprise experimentation with GenAI and cloud-native development.
Support Services grew by 5.2 percent, driven mainly by the renewal of hardware annual maintenance contracts (AMCs).
Strategic Shifts and Future Outlook
Enterprises are increasingly partnering with service providers that offer domain-specific expertise and transformation-led capabilities. Providers are, in turn, strengthening portfolios through alliances and establishing dedicated business units to tap into expanding Global Capability Center (GCC) investments.
According to IDC, the overall IT and Business Services market in India is projected to grow at a compound annual growth rate (CAGR) of 5.8 percent from 2024 to 2029, reaching USD 21.8 billion by the end of the forecast period.
Despite external headwinds such as tariff issues and geopolitical instability, India’s IT sector continues to thrive. The growing integration of GenAI and Agentic AI into enterprise strategy, along with India’s positioning as a preferred GCC destination, reinforces the country’s stature as a global tech services powerhouse.
The Indian IT services sector is projected to grow 4.3 percent year-over-year, reaching $137.1 billion in FY2025, according to IT industry association NASSCOM. This growth is driven by advancements in AI, cloud-native development, and rising cybersecurity demands. AI is emerging as a key focus area, with increased adoption across software development, contact centers, customer experience, knowledge management, and industry-specific applications.
Some of the major Indian IT service providers are Infosys, TCS, Wipro, HCLTech, among others. Infosys has generated revenue of ₹5,052.69 crore from India during fiscal 2025. TCS has generated revenue of ₹21,958 crore from India during fiscal 2025. Wipro does not reveal the size of its revenue from India. Wipro’s total revenue for fiscal-2025 was ₹890,916 crore.
InfotechLead.com News Desk
