India to Spend $7 Billion on IT in 2016: Gartner

Jun 16, 2016

The Indian State will spend $7 billion on IT products and services in 2016, an increase of 3.1 percent over 2015, says Gartner, Inc., the world’s leading IT research company. Leading the pack would be IT services, which are expected to grow at 8.8 percent in 2016 to reach $1.6 billion, with the business process outsourcing sub-segment growing by 22 percent.

Telecom services will be a $1.5 billion USD market, with the mobile network services sub-segment recording the fastest growth of 3.5 percent in 2016 to reach $793 million.

“Government spending on software will total $938 million USD in 2016, a 9.9 percent increase from 2015,” said Moutusi Sau principal research analyst at Gartner. “The software market will be led by growth in infrastructure.”

Internal services will growth 5.8 percent in 2016 to reach $1.5 billion. Internal services refer to salaries and benefits paid to the information services staff of an organization. The information services staff includes all company employees that plan, develop, implement and maintain information systems.

“The ‘Digital India’ initiative continues to be drive investments in the government, led by access of government services on mobile devices, and expansion on broadband services,” said Ms. Sau.

The population of Internet users in India will touch half a billion (580 million) by 2018, up from 260 million in 2015, according to a recent study by the Boston Consulting Group, a global management consulting firm. The report further said that Internet contribution to the GDP is set to grow at 23% compared to 13 per cent overall.

“Initiatives such as Digital India and Make in India have allowed for increased government spending on IT and related fields. Providing basic services online and improving the infrastructure for improved broadband connectivity will provide high trajectory growth to the Indian economy. With massive expansion in the reach of the Internet, especially to small towns and rural areas, the estimate is pretty realizable,” said Shashank Dixit, CEO, Deskera, an Indian IT software company.

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