Indian IT Spending To Grow By 13.8% In 2022: Report

A new report suggests that Indian IT spending will grow by 13.8 per cent in 2022. The growth is down from 25.3 per cent in 2021.

The IT spending will drop in the present year due to recovery sentiment pervasive in Q1 2022 and the drag due to the weakening economic scenario in Q2 2022 onwards. The contraction in IT spending is due to reduced consumer technology spending, report says.

Meanwhile, enterprise technology spending is stable as enterprises continue to protect their budgets and are managing by reallocating resources to needed items.

"Based on the current forecast of a mild global recession, we expect IT spending of Indian enterprises to demonstrate resilience in the short term," says Vinay Gupta, Research Director, IT Spending Guides, IDC Asia/Pacific. "Indian enterprises continue to focus on their digital innovation initiatives, business operations resiliency, and customer experience programs. However, enterprises are keeping a sharp eye on global events," he added.

The report noted that the risk of recession worldwide has continued to rise amid increasing inflation and the expectation of a tightening monetary policy. This means that Indian economy faces similar challenges and enterprises are turning cautious during these uncertain times. Expectations are that India's GDP growth will be at risk in 2023 given the global headwinds, slowing down IT spending growth.

A lot will depend on RBI's monetary policy going forward and the government's public CAPEX push, industrial capacity utilization, and improvement in the infrastructure sector, conclude the IDC report.