India’s IT expenditure is projected to hit $176.3 billion by 2026, reflecting a year-on-year increase of 10.6%, largely fueled by the rapid adoption of cloud and digital technologies, according to a report released on Tuesday. The data centre systems category is anticipated to achieve the highest annual growth rate, soaring 20.5% in 2026 to $9,385 million. The growth in this segment is expected to be propelled by the evolving requirements for data privacy and sovereign cloud solutions through 2026, as indicated by Gartner’s report. Naresh Singh, Senior Director Analyst at Gartner, remarked that the spending on data centre systems is significantly influenced by substantial investments in AI infrastructure and various government initiatives aimed at bolstering the local AI ecosystem.
DD Mishra, VP Analyst at Gartner, noted that as the uncertainty that began earlier this year subsides, the increasing demand for AI infrastructure will drive fresh investments in India’s data centres. Mishra highlighted that local CIOs will maintain a focus on investing in cybersecurity, AI/ML, and data analytics. Their ongoing efforts to modernise applications, enhance connectivity, implement hyper-automation, and improve customer experience and operational efficiency will stimulate growth in IT spending. Software expenditure is expected to increase by 17.6% to reach $24.7 billion as companies boost investments in AI-enabled software solutions and contemporary IT infrastructure.