India’s IT spending is projected to total $89.2 billion in 2019, an increase of 6.7 percent from estimated spending of $83.6 billion in 2018, according to the latest forecast by Gartner, Inc.IT spending in India continues to be driven by digital business transformation initiatives from both private and public organizations. Both sectors have become adaptive to business model change and bring new practices, develop new capabilities and create new ways to succeed in the digital world.

Gartner analysts are discussing the key IT and business issues that are driving digital business this week during Gartner Symposium/ITxpo which is taking place here until Friday.

In particular, three segments are on pace to bolster IT spending levels in India in 2019. “Spending on devices (PCs, tablets and mobile phones) is set to total $33 billion in 2019, a growth of 7.4 percent year over year,” said Ganesh Ramamoorthy, managing vice president at Gartner. “Mobile phones are contributing to the growth in the segment, and their growth is led by the continued shift from feature phones to smartphones. The increasing demand for quality mobile phones has led to the rising average selling price of mobile phones in India, positioning India as having the third-fastest device market growth — behind Indonesia and South Africa.”

“An increased focus on providing a better customer experience is increasing spending on enterprise application software,” said John Lovelock, research vice president at Gartner. “The software as a service market is driving growth in almost all software segments in India, and the customer relationship management SaaS market in India is among the fastest growing in the world. Overall, enterprise software spending is forecast to amount to $6.3 billion and grow 12.9 percent in 2019.”

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

Segments 2017 Spending 2017

Growth (%)

 2018 Spending 2018

Growth (%)

 2019 Spending 2019

Growth (%)
Communications Services 30,419 7.0 29,970 -1.5 30,585 2.1
Datacenter Systems 3,370 14.9 3,467 2.9 3,624 4.5
Devices 28,726 27.4 30,737 7.0 33,014 7.4
Enterprise Software 4,884 13 5,584 14.3 6,306 12.9
IT Services 12,611 16 13,840 9.7 15,706 13.5
Overall IT 80,010 15.8 83,599 4.5 89,235 6.7

Source: Gartner (November 2018)

Spending on IT services is forecast to experience the highest growth in 2019 with a 13.5 percent increase year over year. In this segment, both the business process outsourcing (BPO) and consulting segments are bolstering the growth of IT services spending in India. The BPO segment is projected to reach $1.7 billion and is on pace to achieve 18.5 percent growth, the highest 2019 growth rate of the IT services segment. The consulting segment is ranked second, totaling $4 billion — a 15.9 percent increase in 2019.

“The IT buying pattern in India signals the increased use of cloud services by organizations,” said Partha Iyengar, research vice president and distinguished analyst at Gartner. “Instead of buying their own servers, organizations are turning to the cloud. As organizations continue their digital transformation efforts, shifting to ‘pay for use’ will continue. This sets organizations up to deal with the sustained and rapid change that underscores digital business.”