Enterprise ICT revenue opportunity in India to grow at 9.3% CAGR over 2021-2026

The enterprise ICT revenue opportunity in India is forecast to increase at a compound annual growth rate (CAGR) of 9.3% between 2021 and 2026. This can be attributed to the persistent technology centric innovations by enterprises coupled with government supported digital programs accelerating digital transformation in India, says GlobalData, a leading data and analytics company.

Increasing adoption of emerging technologies, including Industry 4.0 and digital twins, have enabled the Indian government to implement reforms like India Stack, thereby driving the demand for ICT services and products in the country.  

Pragyan Tarasia, Technology Analyst at GlobalData, says: “Government intervention in promoting innovation across verticals and effective technology implementation will help India outpace other economies in the region in terms of growth. This is likely to revive the market by creating a strong demand for ICT products and services among enterprises, thereby driving the enterprise ICT revenue in India over the forecast period.”

IT services to drive enterprise ICT market

According to GlobalData’s forecasts, India’s ICT market will be primarily driven by IT services segment, which is forecast to witness a 9.1% CAGR to reach $80.4 billion in 2026. 

Tarasia continues: “Increasing migration of workloads to the cloud environment to reduce costs, improve security and scalability, is one of the major growth drivers of the Indian ICT services sector. Furthermore, the progressive shift of small and medium-sized businesses towards cloud computing is boosting the growth of the market. Increasing investment towards the development of cloud data centers is also expected to aid India’s cloud computing market over the forecast period.”

BFSI to emerge as largest end-use vertical

GlobalData forecasts the BFSI sector to account for a 13.6% share of the overall cumulative revenue in the overall ICT market in India over the forecast period. ICT revenue from the BFSI sector is forecast to grow at a CAGR of 8.9% to reach $18.6 billion in 2026.

Tarasia adds: “With the BFSI sector focusing more on enhancing legacy infrastructure and embracing digital transformation as a core strategy, it will result in an increased investment inflows into digital services and technologies such as AI, IoT, cloud and blockchain. This necessitates a strong technology stack, which is driving the demand for a range of ICT products and services in this sector. The adoption of a unified payments interface (UPI) and digital payments in the fintech domain will also make the BFSI sector a major market driver for ICT.”

High reliance on IT hardware imports poses significant challenge

Tarasia concludes: “IT hardware is the weakest segment in the overall Indian enterprise ICT market in terms of revenue opportunities compared to software and services. The country is heavily relying on IT hardware imports, particularly from China. However, the COVID-19 pandemic disrupted the global supply chain, forcing the enterprises in India to reduce dependency on a single source. Thereafter, Indian IT companies are looking for ways to make their supply chain more resilient and diversified.”