IT spending in India to total $94 billion in 2020: Gartner

Analysts discuss the outlook for the India IT market during Gartner IT Symposium/Xpo 2019 being held from 11 to 14 November 2019 in Goa

According to the latest forecast by Gartner, Inc., IT spending in India will total US$94 billion in 2020, up from US$88.5 billion in 2019 (an increase of 6.6%).

“2020 will be a rebound year for India’s IT spending as consumers return to purchasing mobile phones after sitting on the sidelines in 2019,” said John-David Lovelock, research vice president at Gartner. “Additionally, business spending on IT grew 6% in 2019 and is expected to increase 9% in 2020, helping to drive growth across all segments.”

Gartner analysts are discussing the macroeconomic trends affecting the IT spending market in India this week during Gartner IT Symposium/Xpo, which is taking place in Goa until Thursday.

Strong growth in total software spending will be driven by enterprise application software which is forecast to grow 17% in 2020. The expected increase in overall business spending will help drive 16% growth in enterprise mobile phone spending in 2020, pushing growth in the devices segment to 6.3% (see Table 1).

Table 1. India IT Spending Forecast (Millions of U.S. Dollars)

 2019 Spending2019 Growth (%)2020 Spending2020 Growth (%)
Data Center Systems3,7262.73,8192.5
IT Services15,78612.017,89713.4
Communications Services29,203-0.129,7882.0
Overall IT88,4762.094,3266.6

Source: Gartner (November 2019)

Business Resilience and Increased Consumer Spending Fuels IT Growth

“Over half of India’s total IT spending is done by consumers, so it was expected that a dip in consumer spending would have a tremendous impact on total IT spending,” said Lovelock. “Consumer resistance to investing in devices has impacted overall IT spending in the country. In 2019, private consumption slowed despite five back-to-back rate cuts throughout the year. This scenario is expected to change in 2020.”

“However, even within the slow economy, businesses showed resilience and continued to invest in IT,” said Arup Roy, research vice president at Gartner. “In mid-2019, the Indian government introduced corporate tax cuts, along with policies that were aimed at reviving the economy and bolstering consumer spending. As a result, corporate spending in software and services saw an uptick and organizations continued to invest in cloud, analytics, digital and automation.”

“In the next two to three years, IT spending will increase as the economy benefits from the goods and service tax (GST) implemented by the Indian government in 2018, and as policies supporting consumer spending come into practice,” said Roy.

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