India's Data Centre and AI Boom to Propel IT Spending to $176 Billion in 2026, Says Gartner

India’s IT spending is expected to reach $176.3 billion in 2026, showing a 10.6% increase from 2025, based on Gartner’s latest forecast. This growth rate is higher than the 9.8% expected at the global level. The estimate shows steady demand for digital systems, cloud use and storage requirements across sectors. 

Data Centre Spending Shows the Fastest Growth 

As per Garnter, the data centre segment is projected to record the strongest rise among all IT categories. Spending here is likely to grow 20.5% in 2026, after a 29.2% jump in 2025.  

The current capacity in India is not enough to handle the rising volume of digital activity. More companies are moving workloads to cloud platforms, and data localisation rules are also adding pressure to expand domestic infrastructure. 

Increased Focus on Infrastructure for AI 

India has become one of the larger user markets for AI-based services. This has led to more investment in local systems that can support higher computing needs. 

New privacy rules and discussions around sovereign cloud storage are also shaping these investments. As AI tools see wider use, the need for stronger infrastructure continues to grow. 

Software Spending Continues to Climb 

Software spending is expected to reach $24.7 billion in 2026, marking a 17.6% rise from 2025. Organisations are updating software to manage newer digital operations and larger data volumes. Gartner’s global outlook suggests that, by 2026, spending on software with built-in generative AI features will exceed spending on software without them. 

IT Services Maintain Double-Digit Growth 

Spending on IT services is projected to grow 11.1% in 2026. Growth is expected to stay in the 12-14% range over the next few years. The increase is linked to ongoing work in infrastructure-as-a-service, consulting and application modernisation. The expansion of global capability centres in India and access to skilled workers support the sector’s rise. 

Read More: Infosys Rolls Out Q2 Performance Bonuses With an Average Payout of 75%! 

Conclusion 

India’s IT spending is set to increase across data centres, software and services. The forecast shows continued demand for systems that can support cloud adoption, digital expansion and growing AI workloads through 2026. 

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