India’s IT Spend to Hit $176 Billion in 2026, Data Centres Lead Growth

India’s overall information technology spending is expected to touch $176.3 billion in 2026, rising 10.6% from 2025, according to the latest forecast by Gartner. The growth is being driven by rapid cloud adoption, rising AI investments and large-scale modernisation efforts across industries. This strong momentum comes even as global IT budgets remain sluggish, affecting revenue growth for Indian software exporters over the past two years.

Software spending in India is projected to grow 17.6% in 2026, reaching $24.7 billion. Enterprises are increasingly adopting AI-powered software and building modern IT systems. As Generative AI becomes deeply integrated into applications, Gartner expects global spending on GenAI-enabled software to surpass non-AI software by 2026.

The fastest-growing area within India’s IT spending will be data centre systems. Investments in this segment are set to rise 20.5% in 2026 to $9.38 billion, following a strong 29.2% jump in 2025. The surge is linked to heavy spending on AI infrastructure as organisations scale model training, inference and data-intensive workloads.

Government initiatives, including the IndiaAI Mission with a budget of over ₹10,000 crore, are also boosting demand by supporting sovereign AI models, GPU-rich data centres, and AI application development. Rising AI adoption in India is pushing global cloud providers to expand local infrastructure to improve performance and meet regulatory requirements.

Source: Moneycontrol