Chennai: With the pandemic accelerating digitization, Information Technology (IT) spending in India is expected to rebound and reach a total of $93 billion in 2021 — an increase of 7.3% from 2020 as per global research firm Gartner.
This is not just an upward revision from the 6% growth predicted by Gartner in November 2020, but also a strong bounce back from 7% decline in the country’s tech spends during the pandemic year 2020.
With this projection, IT spends by Indian organisations also reach closest to the pre-Covid levels during 2019 when India’s IT spends stood at $92 billion.
The IT spending in the country is expected to further grow to $98.5 billion in 2022, as per Gartner’s projections.
The pandemic was an inflection point not only for organizations but also for government agencies to relook at IT as digital spending is flowing from a variety of sectors such as education, BFSI, and others including government, analysts said.
As per Gartner, enterprise software spend is expected to register maximum growth for India at 13.3%, higher than the global average growth rate of 10.8%.
IT services and tech device spends are set to grow at 8.9% and 7.7% respectively to reach $16 billion and $34 billion respectively. Within software, cloud technology is expected to drive majority growth in India during 2021.
“The Indian economy is observing a slow but steady growth trajectory this year. Additionally, the government relaxation of foreign investment in certain sectors such as insurance, infrastructure, telecommunications will provide additional funds for business and IT leaders to accelerate their digital transformation journey,” Naveen Mishra, senior research director at Gartner, said.
However, given the worldwide surge in digital technologies, growth in India’s IT spends is expected to be slower than global growth rates as worldwide IT spending in 2021 is projected to rise 8.4% from 2020 to clock around $4.1 trillion.
“IT no longer just supports corporate operations as it traditionally has, but is fully participating in business value delivery,” John-David Lovelock, research vice president at Gartner, said.
“Not only does this shift IT from a back-office role to the front of business, but it also changes the source of funding from an overhead expense that is maintained, monitored and sometimes cut, to the thing that drives revenue,” he added.