India’s technology spending is projected to grow 13.4% in 2026, retaining its position among the fastest-growing markets in Asia Pacific, even as rising costs and regulatory pressures weigh on the real value of that expansion, according to a Forrester report.
The forecast marks a marginal moderation from 13.7% estimated for 2025, but remains ahead of most regional peers. Growth is expected to stay firm at 13.6% in 2027, supported by sustained enterprise demand and ongoing digital adoption across sectors.
“India’s double-digit technology spending growth is being propelled by a combination of cloud acceleration, regulatory clarity, and strong domestic demand,” Ashutosh Sharma, vice president and research director at Forrester, said.
Localization Engine
A key driver is the shift towards data localisation, which is pushing companies to invest in domestic infrastructure. This has translated into a sharp buildout of data centre capacity, with investments in the segment expected to rise by over 20% in the coming year.
“With data localisation shaping infrastructure strategies and enterprises expanding AI-ready platforms, the priority now is to digitise processes beyond core systems and build scalable data foundations,” Sharma added.
Spending on software is also rising, with vendors increasingly embedding artificial intelligence capabilities into enterprise offerings, often at higher price points. This is contributing to overall budget expansion, even as cost efficiencies remain uneven.
However, the headline growth masks underlying pressures. Across Asia Pacific, technology budgets are facing strain from software price inflation, volatile hardware costs, and rising compliance requirements. Energy disruptions and geopolitical tensions are adding uncertainty, particularly for infrastructure-heavy investments such as data centres.
Talent Premium
In India, talent costs remain elevated. Tech salaries are projected to rise nearly 10% in 2026, the highest increase in the region, reflecting continued shortages and competition for skilled professionals.
By comparison, average IT salaries across Asia Pacific are expected to grow about 5%. Wage increases are seen in the 5–10% range in emerging markets such as Vietnam, around 5% in most Southeast Asian economies, and about 3% in developed hubs including Singapore, Hong Kong, and Australia.
At a regional level, overall technology spending in Asia Pacific is projected to grow 9.3% in 2026, led by investments in software, services, and infrastructure.
“Asia Pacific’s technology spending momentum remains strong, but the headline growth numbers mask a more complex reality,” Frederic Giron, vice president and senior research director at Forrester, said. “CIOs across the region are grappling with software inflation, hardware volatility, and increasing regulatory divergence that directly impact modernisation plans.”
For India, the outlook remains strong on volume growth, but real gains will depend on how enterprises manage rising costs and regulatory complexity alongside continued digital investments.