India’s IT spending is projected to reach $176.3 billion in 2026, marking a 10.6 per cent year-on-year rise, supported by accelerated adoption of cloud services and digital technologies, a Gartner report said on Tuesday.
According to the report, the data centre systems segment is expected to record the fastest annual growth, rising 20.5 per cent to $9,385 million in 2026. Evolving data privacy norms and growing demand for sovereign cloud models are seen as the key drivers of this upward trend.
“Data centre systems spending is primarily driven by substantial AI infrastructure investments and multiple government programmes aimed at strengthening the local AI ecosystem,” said Naresh Singh, Senior Director Analyst at Gartner.
With the slowdown that began earlier this year easing, demand for AI-related infrastructure is expected to renew momentum in 2026, said DD Mishra, VP Analyst at Gartner. He added that CIOs across India will continue to prioritise investment in cybersecurity, AI/ML, and data analytics.
Their continued focus on modernising applications, boosting connectivity, deploying hyper-automation, and improving customer experience and operational efficiency will further propel IT spending growth, he said.
The report projects software spending to grow 17.6 per cent to $24.7 billion, fuelled by increased investment in AI-enabled software and modern IT systems. IT services spending is expected to rise 11.1 per cent in 2026, with sustained double-digit growth predicted in the following years due to strong enterprise demand for IaaS, consulting, and application modernisation.
Gartner also noted that the sector will benefit from the rapid growth of global capability centres (GCCs) and India’s access to a highly skilled, cost-efficient workforce.
Among other segments, devices spending is expected to increase 9.9 per cent to $66,442 million, while communications services spending will rise 5.4 per cent to $40,414 million.
–IANS