Gartner expects 6.6% y-o-y rise in Indian IT spending in 2020

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Bengaluru | Published: November 12, 2019 4:32:05 AM

IT spending in India will total $94 billion in 2020, up from $88.5 billion in 2019, an increase of 6.6%, according to the latest forecast by Gartner.

In 2019, private consumption slowed despite five back-to-back rate cuts throughout the year. This scenario is expected to change in 2020.

IT spending in India will total $94 billion in 2020, up from $88.5 billion in 2019, an increase of 6.6%, according to the latest forecast by Gartner. “2020 will be a rebound year for India’s IT spending as consumers return to purchasing mobile phones after sitting on the sidelines in 2019,” said John-David Lovelock, research vice-president at Gartner.

“Additionally, business spending on IT grew 6% in 2019 and is expected to increase 9% in 2020, helping to drive growth across all segments,” he said.

Gartner’s IT spending forecast methodology relies heavily on rigorous analysis of sales by thousands of vendors across the entire range of IT products and services.

A strong growth in total software spending will be driven by enterprise application software which is forecast to grow 15.2% in 2020.

Following software spending, IT services and devices are expected to see a significant growth in 2020 at 13.4% and and 6.3%, respectively.

In 2019, there was a notable slump in spending on IT devices which stood at (-)2.4%. The expected increase in overall business spending will help drive 16% growth in enterprise mobile phone spending in 2020, pushing growth in the devices segment to 6.3%.

“Over half of India’s total IT spending is done by consumers, so it was expected that a dip in consumer spending would have tremendous impact on total IT spending,” said Lovelock.

According to him, consumer resistance to investing in devices has impacted the overall IT spending in the country.

In 2019, private consumption slowed despite five back-to-back rate cuts throughout the year. This scenario is expected to change in 2020.

“However, even within the slow economy, businesses showed resilience and continued to invest in IT,” said Arup Roy, research vice-president at Gartner.

“In mid-2019, the Indian government introduced corporate tax cuts, along with policies that were aimed at reviving the economy and bolstering consumer spending. As a result, corporate spending in software and services saw an uptick and organisations continued to invest in cloud, analytics, digital and automation,” he added.

Roy stated that in the next two-three years, IT spending will increase as the economy benefits from the GST, as policies supporting consumer spending come into practice.

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