India’s domestic IT and business services market grew 6.1 percent to reach US$14.5 billion in 2023, according to IDC.
This growth is slightly lower than the 7.4 percent in 2022 and is attributed to Indian enterprises exercising caution in their IT expenditures amid volatile macroeconomic conditions.
“Indian enterprises focused on cost optimisation while prioritising IT projects with quicker returns. Enterprises continued to invest in areas like enhancing customer experience and improving operational efficiency to gain a competitive advantage by leveraging technologies like cloud, analytics, and AI/ML,” said Harish Krishnakumar, Senior Market Analyst of IT Services at IDC India.
“In the coming years, IT service investments will be driven by interest in GenAI. Enterprises will continue engaging with IT service providers to develop potential use cases and POCs and also to transform and manage their complex IT infrastructure and applications,” he added.
The IT services segment, which accounts for 78.4 percent of the IT and business services market, grew by 6.6 percent in 2023, down from 8.1 percent in 2022. The overall market is projected to grow at a compound annual growth rate of 7.3 percent from 2023 to 2028, reaching US$20.7 billion by 2028.
“Digital execution has ascended to a C-suite imperative, with CEOs becoming increasingly hands-on in digital technology decision-making. In this context, vendors must showcase their ability to overcome challenges and fulfill the value propositions sought by enterprises, positioning themselves as providers of next-generation, comprehensive, and impactful solutions,” said Neha Gupta, Senior Research Manager of Software and IT Services Market at IDC India.
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Entelechy Asia 