India's IT spending to hit $176 bn in 2026 on data centre, AI boom: Gartner

Gartner projects India's IT spending to rise 10.6% to $176.3 billion in 2026, driven by strong data centre and software investments as enterprises accelerate cloud, AI and digital adoption

IT spending in India is expected to reach $176.3 billion in 2026, an increase of 10.6 per cent from 2025, according to the latest forecast by Gartner, Inc., a business and technology insights company. The growth is being propelled by investments in data centres and software.

 

The data centre systems segment in India is projected to record the highest annual growth rate, increasing 20.5 per cent in 2026, continuing to outpace all other IT segments despite moderating from 29.2 per cent in 2025, said the report.

 

“Enterprises in India are accelerating their adoption of cloud and digital technologies, which will drive sustained, robust growth in IT spending in 2026,” said D D Mishra, VP analyst at Gartner. “As the uncertainty pause that began earlier this year eases, rising demand for AI infrastructure will fuel new investment in data centres in India,” he added.

 

Mishra also added that the expansion of DCs in India is happening as the current availability of data centres is not sufficient to handle the growth that the country is expected to see. The other reason for the growth is the rise of data localisation norms.

 

Naresh Singh, senior director analyst at Gartner, said, “India has one of the largest consumer bases for AI services globally, attracting international investment in local infrastructure to support this expanding user base. Evolving data privacy and sovereign cloud requirements are expected to drive growth in this segment through 2026.”

 

Gartner also added that software spending in India is projected to increase 17.6 per cent in 2026, reaching $24.7 billion, as Indian enterprises ramp up investment in AI-enabled software solutions and modern IT infrastructure.

 

As GenAI increasingly permeates software, it is poised to become a standard, embedded component across nearly all applications. Gartner forecasts that by 2026, global spending on software with GenAI will surpass spending on software without GenAI.

 

“IT services spending in India is forecast to grow 11.1 per cent in 2026, with double-digit growth projected over the next few years — averaging between 12 per cent and 14 per cent,” said Mishra. “This momentum is driven by strong enterprise investments in infrastructure as a service (IaaS), consulting and application modernization.

 

“The rapid growth of global capability centres (GCCs) and access to a highly skilled, cost-effective workforce are expected to further fuel the sector’s progress.”