Gartner Forecasts India IT Spending to Reach $160 Billion in 2025

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India IT spending is projected to total $160 billion in 2025, an increase of 11.2% from 2024, according to the latest forecast by Gartner, Inc.

“In 2025, Indian chief information officers (CIOs) will start allocating budgets for generative AI (GenAI) beyond initial proof-of-concept projects,” said Naveen Mishra, VP Analyst at Gartner. “While spending on GenAI will increase, CIOs’ expectations for its capabilities will diminish. Additionally, Indian CIOs are expected to significantly boost spending on technologies such as cybersecurity, business intelligence, and data analytics in 2025 compared to 2024.”

Gartner analysts are discussing the trends that are impacting the IT market during Gartner IT Symposium/Xpo, taking place here through Wednesday.

GenAI-Enabled Solutions to Propel Software Spending in India

Fueled by expansion in both application and infrastructure software markets, software spending in India is projected to record the highest annual growth rate, increasing 17% in 2025.

“The price premium of GenAI-enabled offerings across customer relationship management (CRM), email and authoring, and analytic platforms will drive software spending, resulting in growth of this segment,” said Mishra.

Gartner predicts that by 2025, more than 50% of application software offerings with GenAI capabilities will carry an associated price premium. Pricing options will continue to evolve through 2025 as buyers are tested for their willingness to pay a GenAI premium.

“Despite the global services market being characterized by cautious spending, macroeconomic uncertainty, and higher capital costs, IT services spending in India is projected to grow 11.4% in 2025,” said Mishra. “Service engagements around cloud, application, and consulting are expected to drive stronger growth in India. Furthermore, GenAI’s role in delivering industry use cases and improving labour productivity will be a key expectation from Indian enterprises in 2025 and beyond.”

Demand for AI-Ready Infrastructure to Boost Data Center Systems Growth

“Spending on data center systems in India is projected to total $4.7 billion in 2025, fueled by the rising enterprise need for new infrastructure to support AI integration,” said Mishra. “Data center providers, including hyperscalers, are expanding their footprint in India to meet enterprise demands for increased data storage and computing capacity, while adhering to regulatory requirements, further driving the growth of this segment.”

Gartner’s IT spending forecast methodology relies heavily on rigorous analysis of the sales by over a thousand vendors across the entire range of IT products and services. Gartner uses primary research techniques, complemented by secondary research sources, to build a comprehensive database of market size data on which to base its forecast.

The Gartner quarterly IT spending forecast delivers a unique perspective on IT spending across the hardware, software, IT services and telecommunications segments. These reports help Gartner clients understand market opportunities and challenges. The most recent IT spending forecast research is available to Gartner clients in “Gartner Market Databook, 3Q24 Update.”