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India's IT spending is set to reach $160 billion in 2025, marking an 11.2% rise from 2024, according to Gartner, Inc. This growth will be powered by increased investments in generative AI (GenAI), cybersecurity, and data analytics, as organizations move beyond proof-of-concept projects for emerging technologies.
“Indian CIOs will allocate larger budgets for GenAI initiatives in 2025, though expectations for its transformative capabilities may temper,” said Naveen Mishra, VP Analyst at Gartner. CIOs are also expected to prioritize spending on cybersecurity, business intelligence, and data analytics, reflecting the evolving needs of the Indian enterprise landscape.
Software Spending to Lead Growth
Software will experience the fastest growth among IT segments, with a 17% increase in spending in 2025. This surge will be driven by the premium pricing of GenAI-enabled features in applications such as customer relationship management (CRM), analytics, and email platforms. By 2025, over half of GenAI-enhanced software is expected to command a price premium.
“GenAI-enabled software solutions are reshaping market dynamics, particularly in platforms offering CRM, authoring tools, and analytics,” Mishra noted. “Pricing strategies will evolve as organizations assess the value of GenAI’s capabilities.”
India IT Spending Breakdown (2023–2025)
| Segment | 2023 Spending ($M) | 2024 Growth (%) | 2025 Spending ($M) | 2025 Growth (%) |
|---|---|---|---|---|
| Data Center Systems | 3,818 | 12.9 | 4,798 | 11.3 |
| Devices | 49,461 | 13.0 | 63,105 | 12.9 |
| Software | 15,478 | 15.7 | 20,945 | 17.0 |
| IT Services | 27,630 | 8.8 | 33,503 | 11.4 |
| Communications Services | 34,019 | 5.0 | 37,608 | 5.3 |
| Total IT Spending | 130,406 | 10.3 | 159,960 | 11.2 |
AI-Ready Infrastructure Drives Data Center Growth
Demand for infrastructure capable of supporting AI workloads will push spending on data center systems to $4.7 billion in 2025. Enterprises are increasingly investing in scalable solutions to manage AI integration, while hyperscalers expand their presence in India to meet growing demands for storage and computing power.
“Data center providers are responding to enterprise demands for greater capacity while ensuring compliance with regulatory requirements, further fueling growth,” said Mishra.
IT Services Defy Global Trends
Despite global economic challenges, IT services spending in India is expected to grow by 11.4% in 2025, driven by engagements in cloud, application modernization, and consulting services. Indian enterprises are increasingly leveraging GenAI to deliver industry-specific solutions and enhance labor productivity.