AINews & Analysis

India’s IT Spending to Exceed $100 Bn in 2022 as Post-Pandemic Revival


IT spending in India is forecast to total $101.8 billion in 2022, an increase of 7% from 2021, according to the latest forecast by analyst firm Gartner, Inc.

“The digital transformation trajectory that began as a pandemic response is here to stay for the next few years,” said Arup Roy, research vice president at Gartner.

“India has experienced one of the fastest recoveries despite being one of the worst hit regions in the second wave of the pandemic in early 2021. In 2022, CIOs in India will build on renewed interest in technology from the business to gain funding for new IT projects,” he said at the Gartner IT Symposium/Xpo 2021 India.

In 2022, all segments of IT spending in India are expected to grow, with software emerging as the highest growing segment. Spending on software is forecast to total $10.5 billion in 2022, up 14.4% from 2021 . While experiencing a slower growth rate than 2021, spending on software in 2022 is forecast be nearly double of what it was pre-pandemic.

Gartner also sees that the spending on devices, which accounts for 43% of India’s total technology expenditure, will grow at 7.5% in 2022 after 14% growth in 2021. As hybrid work adoption increases in the country, there will be an uptick in spending on devices in 2022, reaching $44 billion, an increase of 7.5% from 2021.

The growth in devices is a combination of two components – hybrid work and pent-up demand from 2020 for device upgrades. Spending on devices will make up 43% of total IT spending next year. Demand will continue to increase despite the global chip shortage weighing on availability in the first two quarters of 2022, said Gartner.

IT Services segment is likely to increase by 9% year-on-year to $19 billion in 2022, driven by BFSI and telecom sectors. With other sectors catching up, the services segment will likely continue in the next five years with very strong growth, said Gartner. Software spending will also increase thanks to collaboration solutions, digital enablement apps, security and hyper-automation solutions, it said.

Of the other sectors, the communication industry has witnessed the maximum fluctuation in growth rate during 2020-21 as companies increased their spending in the sector during the pandemic to enable remote work and online education. Data Centres is another segment that is expected to grow 3.4% over the year-ago period to $2.8 billion in 2022 due to pent-up demand from 2020 that businesses are still addressing.

Indian CIOs are likely to increase their spending towards projects that drive innovation and modernizing legacy systems. Hiring a workforce that can deliver on these needs will also be a key priority. Next year, Indian CIOs are prioritizing a move away from rigid and monolithic ways of doing business to a more composable business and IT architecture where they will be able to better respond to disruptions.

Leave a Response