India’s technology landscape is gearing up for another year of robust expansion, with IT spending expected to reach $176.3 billion in 2026, according to a new forecast by Gartner. The report highlights double-digit annual growth driven primarily by escalating demand for AI infrastructure, growing cloud modernization initiatives, and strategic digital investments across industries.
AI Infrastructure Fuels Data Center Expansion
Among all IT segments, data center systems are projected to see the fastest growth, surging 20.5% to $9.38 billion. Gartner attributes this momentum to evolving data sovereignty requirements and significant local investment in AI compute capacity.
Naresh Singh, Senior Director Analyst at Gartner, noted that India’s aggressive push toward AI adoption is reshaping infrastructure priorities. Government-led programs and private-sector initiatives are collectively accelerating the build-out of domestic AI capabilities.
DD Mishra, VP Analyst at Gartner, added that the temporary slowdown seen earlier in the year has begun to fade, with organizations increasingly committing to large-scale AI-focused infrastructure investments.
CIO Priorities: Cybersecurity, AI/ML, and Data Analytics
Indian CIOs continue to channel resources toward strengthening cybersecurity, expanding AI and machine learning capabilities, and upgrading enterprise analytics platforms. These focus areas reflect a broader shift toward intelligent, secure, and automated digital ecosystems.
Key enterprise priorities include:
- Modernizing legacy applications
- Enhancing network and cloud connectivity
- Deploying hyper-automation
- Improving customer experience
- Boosting operational efficiency
Collectively, these initiatives are expected to act as major contributors to nationwide IT spending growth.
Software and Services Continue Strong Upward Trajectory
Software spending is forecast to grow 17.6% year-on-year to $24.7 billion, fueled by rising adoption of AI-enabled software, cloud-native technologies, and modern development architectures.
IT services — already one of India’s strongest technology pillars — are predicted to grow 11.1% in 2026. Gartner anticipates sustained double-digit growth over the next several years, driven by demand for:
- Infrastructure as a Service (IaaS)
- Digital consulting
- Application modernization and migration
A key tailwind is the rapid expansion of Global Capability Centers (GCCs) in India, supported by a highly skilled, cost-effective talent pool.
Devices and Communications Also Recovering
Device spending is expected to rise 9.9%, reaching $66.4 billion, signaling renewed demand across consumer and enterprise markets. Communication services are projected to grow 5.4%, touching $40.41 billion, supported by increased data consumption and broader digital adoption.
A Multi-Year Growth Cycle Ahead
With organizations accelerating their digital roadmaps and investing heavily in AI-driven transformation, India’s IT sector appears poised for a multi-year growth runway. The combination of strong enterprise demand, maturing cloud ecosystems, and vibrant AI innovation positions the country to maintain its upward trajectory well beyond 2026.
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