According to the latest report of the International Data Corporation (IDC), the Indian IT Services sector grows a year-over-year (YoY) increase of 6.4% in 1H2024, accounting for 79.2% of the overall IT & Business Services market.
This growth highlighted increasing investment in digital transformation, including cloud migration and GenAI solutions integration. Enterprises are focusing on IT projects, highlighting cost optimization and operational efficiencies to enhance their competitive market positioning.
In 1H2024, India’s IT and Business Services market reached USD 7.4 billion, reflecting a 5.9% YoY growth, down from 6.2% in 1H2023. Forecasts indicate a compound annual growth rate (CAGR) of 6.4% from 2023 to 2028, with the market expecting to reach USD 19.8 billion by the end of the prediction period.
IDC categorizes the IT and Business Services market into three main elements: Project-Oriented Services, Managed Services, and Support Services.
In 1H2024, Project-Oriented Services recorded the highest growth rate at 6.4%, followed by Managed Services at 5.6%, and Support Services at 5.4%.
“Indian enterprises prioritized critical projects in areas like digital transformation, cloud migration, GenAI, cybersecurity, etc., amidst cost optimization initiatives to drive innovation, improve business outcomes, and remain competitive,” said Harish Krishnakumar, Senior Market Analyst, IT Services of IDC India.
“As the macro-economic environment gradually improves, the resulting rebound in discretionary spending and increased investments in digital transformation are expected to drive IT services investments during the forecast period. Investments in GenAI would likely surge as enterprises try leveraging GenAI for improved decision-making, enhancing customer experience, etc., and integrating this into existing business applications, with IT service providers as their prime technology partners for their GenAI plans,” he added.
Also Read: IDC Forecast Datacenter IT Power Capacity in Asia Pacific to Reach 94.4 Gigawatts in 2028The system integration segment’s blossoming is predicted to be driven by initiatives such as cloud migration, application modernization, and the integration of emerging technologies. Also, services related to data engineering and infrastructure modernization will facilitate the adoption of GenAI.
“The India IT ecosystem stands at a pivotal moment. As investments in AI and GenAI transition from discussions to implementation, the demand for advanced capabilities and elevated expectations from IT service providers is set to reshape the industry,” said Neha Gupta, Senior Research Manager, Software and IT Services Market of IDC India.
