India IT Spend: Data Centre Growth to Rise 20.5% in 2026, Says Gartner

Key Points

• India IT Spend: Data Centre Growth is forecasted to rise by 20.5% in 2026, outpacing all other tech categories.

• India IT Spend: Data Centre Growth will drive the country’s AI, cloud, and modernisation wave throughout 2026.

• India IT Spend: Data Centre Growth aligns with Gartner’s prediction that India’s total IT spending will cross $176.3 billion.

India IT Spend: Data Centre Growth

India’s digital economy is expanding fast, and according to a new forecast from Gartner, the total India IT Spend will reach $176.3 billion in 2026, driven mainly by strong Data Centre Growth. This marks a 10.6% increase from 2025, reflecting how Indian companies, startups, government platforms, and global service providers are all investing heavily in technology. Gartner notes that even though global IT budgets are moving slowly and many Western markets are seeing weak growth, India is still showing strong momentum. This rise is being fueled by rapid adoption of cloud computing, artificial intelligence, and large-scale digital transformation projects across multiple industries. Organisations in India are modernising their systems to stay competitive, improve productivity, and prepare for an AI-driven future. As industries across the country shift to cloud-based tools and intelligent automation, the need for faster, more secure, and more scalable infrastructure continues to grow. This shift has made data centres the backbone of India’s technology ecosystem, leading to large investments in new facilities, advanced servers, and high-performance computing systems.

India IT Spend: Data Centre Growth

The forecast highlights that Data Centre Growth will be the strongest among all technology categories, rising by 20.5% in 2026, far above the growth rates of devices, IT services, or communication technologies. This increase is directly tied to the rising need for AI computing power, as machine learning models, generative AI tools, and automation engines require high-speed processing and huge storage capacity. Because of this, companies are upgrading their data infrastructure at a rapid pace, and many global hyperscalers such as Amazon Web Services, Microsoft Azure, and Google Cloud are expanding their India footprint with new availability zones and large-scale data parks. The trend also matches the growing push for digital public infrastructure in India—platforms that handle payments, identity verification, e-governance, health data, and enterprise services all need dependable data systems to function smoothly. Even traditional industries like banking, retail, pharmaceuticals, and manufacturing have begun relying on real-time analytics, AI-based decision-making, and cloud platforms to operate efficiently. All these factors make data centres the core of India’s future digital expansion. As companies continue adopting cloud-native apps and AI tools at record speed, the demand for advanced data centres will rise even more in the coming years.

India IT Spend: Data Centre Growth

Gartner also predicts strong growth in software investments, with spending expected to rise 17.6% in 2026, reaching $24.7 billion. This category includes AI-enabled applications, automation tools, cybersecurity systems, and cloud management platforms that support everyday business operations. The increase reflects how Indian companies are moving away from outdated legacy systems and shifting aggressively toward modern digital solutions. The expansion of software spending also connects directly with Data Centre Growth, because more advanced software systems create more demand for powerful infrastructure, storage, and processing capabilities. Even as global markets struggle with slower tech investments, India remains an outlier with consistent double-digit spending increases. This reflects the country’s strong push toward digital competitiveness and its fast-growing role as a global IT leader. As industries focus on boosting productivity, scaling operations, and improving customer experiences through AI, their reliance on cloud platforms and data-driven tools will deepen. This deepening adoption is exactly why India’s IT spending keeps climbing and why data centres remain so essential for national growth. At the same time, large organisations are investing in hybrid systems—combining traditional on-site servers with cloud-based options—to ensure reliability, security, and cost efficiency. This further supports the ongoing wave of infrastructure upgrades happening across India.

India IT Spend: Data Centre Growth

These forecasts also come at a critical time for the country’s software export industry. Over the last two years, global economic uncertainty and slow overseas technology budgets have caused India’s major IT exporters to report only low single-digit revenue growth. However, domestic demand remains strong, helping the industry stay resilient despite global challenges. The emphasis on Data Centre Growth and overall India IT Spend indicates that the local market will continue to support IT firms, cloud providers, and technology companies operating in India. Many Indian businesses are speeding up their cloud adoption strategies, rolling out automation across workflows, and exploring deeper use of AI-based tools for marketing, HR, finance, governance, logistics, and customer service. As AI continues to influence business decisions and day-to-day work, organisations are prioritising investments in systems that enable faster innovation. The rise of gen-AI, AI assistants, predictive analytics, and digital transformation pipelines means the need for robust and scalable infrastructure will keep increasing. This trend makes data centres one of the most critical assets in India’s technology landscape. If these patterns continue, India could soon become one of the world’s biggest hubs for cloud operations, AI development, and data infrastructure.