Analysts expect spending in India’s IT sector to grow 11.9% to $145.9 billion in 2024. Cloud, data centers and generative AI, while small in scale today, are likely to be the fastest-growing areas in the coming years, according to industry experts.
According to Gartner data, IT spending in India is expected to grow from $130.4 billion in 2023. Areas such as data center systems 16.5%, devices 14.5%, software 17.2%, IT services 11.1% and communication services 6% are expected to see significant growth.
India IT Spending Forecast
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“2023 has been a slow year for IT spending across the globe, including in India. However, the overall economic picture in India is currently quite optimistic. Moreover, expectations of interest rate cuts by the Fed and RBI are likely to boost the economic picture for the corporate sector,” said Dr. Vikas V. Gupta, Small Case Manager, CEO and Chief Investment Strategist, Omniscience Capital.
He added that Indian companies are investing heavily to capitalize on expected demand in the next economic cycle and that the economy is expected to grow strongly over the next few years. “In this backdrop, investments in IT and intangible assets are essential to put in place the systems to capitalize on growth in fixed tangible assets,” he said.
Gupta also noted that the leading segment will continue to be devices, followed by IT and communication services. The increase in spending will be a tailwind for domestically-oriented companies, providing a positive boost to their revenues. Continued spending on IT is likely to make Indian businesses and the government more efficient and competitive.
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Meanwhile, Gartner predicts that global IT spending will reach $5.26 trillion in 2024, up 7.5% from $4.89 trillion in 2023.
“Spending on data center systems is expected to increase 24% in 2024, up from a 10% increase forecast last quarter, driven by planned increases in GenAI,” the report said.
Globally, IT companies are expected to invest the most in data centers, which are expected to grow at 24.1%, followed by software at 12.6%. However, the opposite is true in India.
Worldwide IT Spending Forecast
“If global demand goes up, that will trickle down to India as well. For Indian companies, if global business goes up, their spending in India will also go up because it has a second-order effect,” said Pareek Jain, CEO, Pareek Consulting and EIIR Trends.
About GenAI, he said, “AI is one of the drivers as when companies do a proof of concept (POC), they may need capabilities and investment in AI. But in terms of value, AI may not be that significant because globally, it will account for just 1-2% of revenues. But still, the interest is there. Some Indian companies may be interested in AI projects. That will encourage them to approach larger vendors.”
https://www.thehindubusinessline.com/info-tech/indian-it-spending-likely-to-reach-1459-billion-in-2024-say-analysts/article68484866.ece
