Saturday, May 31, 2025
Saturday, May 31, 2025
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India’s IT spending to grow by 11.2% to $160b in 2025

CIOs are beginning to allocate budgets for GenAI beyond initial proof-of-concept projects

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  • Noteworthy trend towards enhanced expenditure on cybersecurity, business intelligence, and data analytics.
  • Software sector will likely witness the most pronounced growth, fueled largely by advancements in application and infrastructure software.
  • India’s information technology landscape is poised for significant growth, with projected IT spending reaching $160 billion in 2025.

The anticipated increase of 11.2 per cent from 2024, as reported by Gartner, Inc., reflects the dynamic shifts occurring within the industry. Central to this transformation is the evolving focus of Chief Information Officers (CIOs), particularly concerning generative artificial intelligence (GenAI) and other emerging technologies.

As highlighted by Naveen Mishra, VP Analyst at Gartner, Indian CIOs are beginning to allocate budgets for GenAI beyond initial proof-of-concept projects. This signals a maturation of the technology, as organisations transition from exploration to implementation.

“Despite an increase in spending on GenAI, it is crucial to note that expectations regarding its capabilities may moderate. This adjustment emphasises a more pragmatic approach to technology integration, ensuring that investments yield tangible benefits.”

In addition to GenAI, he said that there is a noteworthy trend towards enhanced expenditure on cybersecurity, business intelligence, and data analytics.

GenAI capabilities

The projected growth in these areas indicates a heightened awareness among Indian enterprises of the need for robust security measures and data-driven decision-making tools.

The software sector will likely witness the most pronounced growth, fueled largely by advancements in application and infrastructure software. With a projected annual growth rate of 17 per cent in 2025, the software segment reflects increasing investments across various platforms, particularly those enriched with GenAI capabilities.

The anticipated price premium associated with these offerings underscores a market readiness to invest in advanced technology solutions, driven by the promise of improved operational efficiency and enhanced customer engagement.

Moreover, the IT services market in India is expected to experience a healthy growth rate of 11.4 per cent, despite broader global economic challenges.

This resilience will be propelled by service engagements related to cloud solutions, applications, and consulting. The ability of GenAI to provide tailored industry use cases and enhance labour productivity will play a vital role in shaping the future of IT services.

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