India IT spending to reach USD 160 billion in 2025 fueled by application and infrastructure software market growth: Gartner

Information technology (IT) related spending in India is projected to reach a total of USD 160 billion in 2025, an increase of 11.2 per cent from 2024, fueled by expansion in both application and infrastructure software markets, according to the latest forecast by Gartner, Inc.

The global consulting firm added that software spending in India is projected to record the highest annual growth rate, increasing 17 per cent in 2025.

Gartner predicts that by 2025, more than 50 per cent 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, the report added.

“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.

Additionally, Indian CIOs are expected to significantly boost spending on technologies such as cybersecurity, business intelligence, and data analytics in 2025 compared to 2024, he added.

“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,” Mishra added.

The Gartner analyst added that IT services spending in India is projected to grow 11.4 per cent in 2025, despite the global services market being characterized by cautious spending, macroeconomic uncertainty, and higher capital costs.

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

Service engagements around cloud, application, and consulting are expected to drive stronger growth in India, he added.

Furthermore, as mentioned in the report, GenAI’s role in delivering industry use cases and improving labour productivity will be a key expectation from Indian enterprises in 2025 and beyond.

“Spending on data center systems in India is projected to total USD 4.7 billion in 2025, fueled by the rising enterprise need for new infrastructure to support AI integration,” said Mishra.

The report adds that the 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.