IT spending in the country is estimated to reach a total of $124.6 billion in 2024, up by 10.7% from 2023, said a report from Gartner. This follows a year of muted growth that was dragged down by lower investments in devices and communications services.
Gartner predicts that in 2024 the spend will be led by investment in software and IT services that may see a growth of 18.5% and 14.6%, respectively.
Naveen Mishra, VP, Team Manager at Gartner, said, “While investments in artificial intelligence (AI) and Generative AI (GenAI) will contribute to IT spending growth in India, their impacts on IT spending levels will not be evident until 2025. GenAI will account for a small portion of IT spending through 2024.”
“Indian firms are expected to make investments in AI and automation during this time, as a strategic effort to improve operational efficiency and address the ongoing shortage of IT talent. However, it is not until 2025 that GenAI will begin to carve its place in IT budgeting amongst Indian companies,” Mishra added.
As Indian organisations accelerate the adoption of digital technologies such as AI, machine learning, secure access service edge (SASE), there will be a greater implementation of cloud services, resulting in growth for both software and IT services, added Mishra. “The lack of internal skills within Indian businesses will also contribute to the growth of IT services spending in 2024.”
While devices spending in India was sluggish in 2022 and 2023, due to inflationary pressures, it is likely to witness a strong resurgence in 2024, growing 10.1% year-over-year. “The double-digit growth can be attributed to Indian consumers’ willingness to pay a higher price for better experience when upgrading to new smartphones,” said Mishra.