Indian enterprises are likely to spend an incremental $7 bn on software and IT services in 2026

As enterprises strive to become AI-ready and with a willingness to spend on software with Gen AI capabilities, leading to ramp-ups in IT budgets, tech research and advisory firm Gartner expects India IT spending to exceed $176 billion in 2026, up from $150.9 billion in 2025.

In its latest forecast, Gartner expects IT services spending in India to grow at 11.1% in 2026, and a steady double-digit growth is expected to continue over the next few years, averaging between 12% and 14%.

Spending on IT services is set to rise from $31.8 bn to $35.3 bn IT services, while on software, India Inc is expected to $24.7 bn in 2026 from $21 bn in 2025. The main drivers the firms see for the increased tech spending of Indian companies are largely on the back of the adoption of capabilities like cloud platform, digital technologies, and AI/ML capabilities, along with other local priorities such as cyber security investment, and investment in data analytics.   

In 2026, globally, spending on software with GenAI is expected to surpass spending on software without GenAI. However, with India’s growth outpacing the rest of the world, DD Mishra, VP Analyst at Gartner IT, sees enterprises continuing to invest in IT services infrastructure, especially the intelligent infrastructure.

“Infrastructure as a service model is something which is again going to become one of the favourite investments, along with consulting, modernisations, which is a natural outcome of that particular investment,” he said. Given the Global Capability Centre expansion in India on steroids, he adds that this is also set to be a leading contributor to growth, especially in the software and other services.  

 With AI integration in tech and data sovereignty, both gathering momentum, spending on data is also set to increase. From an end user spending standpoint, Gartner sees it as either constructing of own data centres or paying hyperscalers. In 2026, Indian enterprises are likely to increase spending on data centre systems by 20.5 per cent, i.e. from $7.7 bn in 2025 to $9.3 bn in 2026.

While global firms like Microsoft, Google have already announced their large data centre plans for India or other partnerships with some of the Indian providers, Misha points to as market validation and a positive growth story in the segment, bringing on the table. “Data sovereignty is one of the biggest things shaping how we are going to consume the data, and data privacy and sovereign cloud requirements are also fueling a lot of growth and helping to drive the data centre systems growth at this point,” he added.