India’s IT Spending Set for 10.6% Growth, To Hit $176.3 Billion in 2026
India’s IT spending is projected to reach $176.3 billion in 2026, marking a significant 10.6% year-on-year increase, according to a recent Gartner report. This growth is primarily fueled by accelerated adoption of cloud services and digital transformation initiatives across industries.
Key Takeaways
- Data centre systems show highest growth at 20.5% to $9.4 billion
- Software spending to increase 17.6% to $24.7 billion
- AI infrastructure and cybersecurity remain top investment priorities
Data Centre Systems Lead Growth
The data centre systems segment is expected to record the highest annual growth rate at 20.5% in 2026, reaching $9,385 million. Evolving data privacy regulations and sovereign cloud requirements are driving this expansion through 2026.
“Data centre systems spending is primarily driven by substantial AI infrastructure investments and multiple government programs aimed at strengthening the local AI ecosystem,” said Naresh Singh, Senior Director Analyst at Gartner.
“As the uncertainty pause that began earlier this year eases, rising demand for AI infrastructure will fuel new investment in data centres in India,” said DD Mishra, VP Analyst at Gartner.
Enterprise Investment Priorities
According to Mishra, Indian CIOs continue to prioritize investments in , AI/ML, and data analytics. Their commitment to modernizing applications, strengthening connectivity, implementing hyper-automation, and enhancing customer experience will further propel IT spending growth.
Software and Services Expansion
Software spending is projected to grow 17.6% to $24.7 billion as enterprises increase investment in AI-enabled software solutions and modern IT infrastructure. IT services spending is set to grow 11.1% in 2026, with double-digit growth projected over the next few years, driven by strong enterprise investments in infrastructure as a service (IaaS), consulting, and application modernization.
Global Capability Centres Driving Growth
The rapid expansion of global capability centres (GCCs) and access to a highly skilled, cost-effective workforce are significant contributors to the sector’s growth. Devices spending is expected to rise 9.9% to $66,442 million, while communications services will grow 5.4% to $40,414 million.
