Will India’s IT Spending Surge to $176.3 Billion by 2026?
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Synopsis
India's IT sector is on a robust growth trajectory, expected to hit $176.3 billion by 2026, bolstered by cloud adoption and AI investments. This report details the major growth areas and the driving forces behind this significant shift in IT spending.
Key Takeaways
- India's IT spending is set to rise to $176.3 billion by 2026.
- Cloud and digital technology adoption are primary growth drivers.
- Data center systems will experience a significant growth rate of 20.5%.
- AI and cybersecurity investments will remain a priority for CIOs.
- Software spending is expected to increase by 17.6%.
New Delhi, Nov 18 (NationPress) India's IT expenditure is projected to climb to $176.3 billion by 2026, reflecting a 10.6 percent year-on-year increase, primarily fueled by the rapid adoption of cloud and digital technologies, according to a report released on Tuesday.
The data center systems sector is anticipated to achieve the highest annual growth rate of 20.5 percent, reaching $9,385 million in 2026. The evolution of data privacy regulations and the demand for sovereign cloud services are expected to propel growth in this area throughout 2026, as stated in the report from Gartner.
Naresh Singh, Senior Director Analyst at Gartner, noted, “The surge in spending on data center systems is chiefly driven by significant investments in AI infrastructure and numerous government initiatives aimed at bolstering the local AI ecosystem.”
In a similar vein, DD Mishra, VP Analyst at Gartner, commented that as the period of uncertainty that began earlier this year subsides, the growing demand for AI infrastructure will spark new investments in data centers in India.
Mishra emphasized that local CIOs will persist in prioritizing investments in cybersecurity, AI/ML, and data analytics.
This ongoing dedication to modernizing applications, enhancing connectivity, implementing hyper-automation, improving customer experiences, and operational efficiency will drive the growth of IT spending, he added.
Furthermore, software expenditures are expected to rise by 17.6 percent to $24.7 billion, as businesses increase their investments in AI-enabled software solutions and contemporary IT infrastructure.
IT services spending is also set to expand by 11.1 percent in 2026, with sustained double-digit growth anticipated in the upcoming years, fueled by robust enterprise investments in infrastructure as a service (IaaS), consulting, and application modernization.
The Gartner report indicates that the swift expansion of global capability centers (GCCs) and access to a highly skilled, cost-efficient workforce will drive the sector's growth. Device expenses are predicted to escalate by 9.9 percent to $66,442 million, while communications services will increase by 5.4 percent to $40,414 million, as noted in the report.
Point of View
This report underscores the vital role that digital transformation plays in India's economic landscape. As the nation embraces cutting-edge technologies, it is crucial for stakeholders to align with these trends to harness potential growth and innovation. NationPress remains committed to providing insights that reflect the pulse of the nation.
NationPress
18/11/2025
Frequently Asked Questions
What is the projected IT spending for India in 2026?
India's IT spending is projected to reach $176.3 billion in 2026.
What factors are driving this growth?
Accelerating adoption of cloud and digital technologies, alongside investments in AI infrastructure, are key drivers.
Which sector will see the highest growth?
The data center systems segment is expected to record the highest annual growth rate of 20.5%.
What is the expected increase in software spending?
Software spending is projected to grow by 17.6% to reach $24.7 billion.
How will IT services spending change?
IT services spending is expected to grow by 11.1% in 2026.
