India’s IT Spending Set for Strong Growth in 2026
India’s IT spending is projected to grow 10.6% year-on-year to reach $176.3 billion in 2026, driven by accelerated adoption of cloud and digital technologies, according to a Gartner report.
Key Takeaways
- Data centre systems to see highest growth at 20.5%
- Software spending expected to increase 17.6%
- IT services projected to grow 11.1%
- AI infrastructure investments driving major expansion
Sector-wise Growth Projections
The data centre systems segment will record the highest annual growth rate, rising 20.5% in 2026 to $9,385 million. Evolving data privacy and sovereign cloud requirements are expected to drive this segment’s growth 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, local CIOs will 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 propel IT spending growth.
Software spending is projected to grow 17.6% to $24.7 billion as enterprises ramp up 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.
Workforce and GCC Expansion
The rapid growth of global capability centres (GCCs) and access to a highly skilled, cost-effective workforce will drive the sector’s growth, the report noted.
Devices spending is expected to rise 9.9% to $66,442 million, while communications services will grow 5.4% to $40,414 million.
