Gartner’s India IT spending forecast up at $161.5 billion, down 11.1% in percentage terms

India’s overall IT spending is expected to grow by 11.1% to $161.5 billion in 2025 from $145.4 billion in 2024, which grew by 9.8% from 2023, according to the latest forecast by research and consulting firm Gartner.While this is a tad lower in percentage terms from its November forecast of 11.2%, in absolute terms, the spending is set to increase from the earlier estimate of $160 billion for 2025.

In comparison, the worldwide IT spending is estimated to increase by 9.8% to $5.61 trillion in 2025, up from $5.11 trillion in 2024.

In India, software and IT services are major drivers of IT spending growth, increasing 16.9% and 11.2% to $17.9 billion and $30.1 billion in 2025, respectively.

While at a lower base, spending on data centre systems is expected to almost double in percentage terms at 19.1% this year to $5 billion, up from $4.2 billion last year when it grew 10.3%, data from Gartner showed.

“While software spending is propelled by the price premium of generative AI (GenAI)-enabled solutions, IT services spending is fuelled by enterprises’ need for cloudification, digitisation, and consulting services,” said Naveen Mishra, VP analyst at Gartner.

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Global IT spending is surging, driven by the rapid rise of GenAI, Gartner said in a report. It is on pace to surpass $7 trillion in four years.“By 2028, GenAI will account for over $1 trillion in spending, including the new markets, such as AI models, specialised AI-managed services and AI-optimised IaaS (Infrastructure-as-a-Service),” the report stated. Iaas is a cloud computing model that provides on-demand access to computing resources such as servers, storage, networking, and virtualisation.

Gartner predicts that by 2026, over 50% of software spends within application software will be influenced by GenAI. As enterprises focus on developing and enhancing technological frameworks for AI, investment in tools and platforms for deployment, management, and scaling will increase, Gartner added.

According to Mishra, enterprises are investing in AI-ready infrastructure for targeted use cases. “The emphasis on accelerated servers for AI workloads is a significant driver, resulting in increased end-user spending in this segment in 2025 compared to the previous year,” he said.

“While budgets for CIOs (chief information officers) are increasing, a significant portion will merely offset price increases within their recurrent spending,” said John-David Lovelock, distinguished VP analyst at Gartner.

“This means that, in 2025, nominal spending versus real IT spending will be skewed, with price hikes absorbing some or all of budget growth. All major categories are reflecting higher-than-expected prices, prompting CIOs to defer and scale back their true budget expectations,” Lovelock added.

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