New Delhi: IT spending in India is forecast to cross $94 billion in 2020, up 6.6 per cent from $88.5 billion in 2019, research firm Gartner said on Monday. “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,” Gartner research vice president John-David Lovelock said. Business spending on IT grew 6 per cent in 2019 and is expected to increase 9 per cent in 2020, helping to drive growth across all segments, he added.
Gartner said the strong growth in total software spending will be driven by enterprise application software, which is forecast to grow 17 per cent in 2020. The expected increase in overall business spending will help drive 16 per cent growth in enterprise mobile phone spending in 2020, pushing growth in the devices segment to 6.3 per cent, it added.
Over half of India’s total IT spending is done by consumers, so it was expected that a dip in consumer spending would have tremendous impact on total IT spending, Lovelock said. “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,” he added.
The IT services spending is expected to touch $17.8 billion, while that on devices and software is expected to be at $35.4 billion and $7.3 billion, respectively, in 2020. Spending on data centre systems is forecast to be $3.8 billion, and communications services at $29.7 billion in 2020. Gartner research vice president Arup Roy said even within the slow economy, businesses showed resilience and continued to invest in IT.
“In mid-2019, the Indian government introduced corporate tax cuts, along with policies that were aimed at reviving the economy and bolstering consumer spending,” he noted. As a result, corporate spending in software and services saw an uptick and organisations continued to invest in cloud, analytics, digital and automation, he added. Roy said IT spending will increase in the next two to three years as the economy benefits from the goods and services tax (GST) implemented by the government in 2018, and as policies supporting consumer spending come into practice.