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IT spending in India for 2024 is expected to grow 11 per cent year-on-year (YoY), reaching $44 billion, an International Data Corporation (IDC) report said on Thursday.

As India’s digital economy continues to thrive in 2024 and beyond, IDC expects IT spending in the country to accelerate at a Compound Annual Growth Rate (CAGR) of 9.9 per cent over the coming years to cross the $59 billion mark in 2027, with the software market consistently showing double digit growth across the forecasted years.

Generative AI (GenAI) will continue to accelerate AI adoption in India with more leading organisations exploring or investing in GenAI use cases.

As technology leaders realise AI’s pivotal role in their digital-first strategies, the report forecasts that investments on GenAI by 2027 will be 26 per cent of the overall AI spend in the country or a CAGR of 101.6 per cent.

“India Inc.'s shift to digital continues unabated as enterprises march aggressively towards an ‘AI Everywhere’ future. We can clearly see this in the growth of AI investments from Indian enterprises,” said Vasant Rao, Managing Director, IDC India and South Asia.

In 2023, despite economic headwinds and uncertainty, Indian enterprises continued to invest in digital technology to increase customer engagement and satisfaction, launch new products and services, and improve operational efficiency to drive revenue growth and profitability.

“They allocated their budgets mainly to software, application development and Cloud migrations, a reflection of their judiciousness to make their hardware assets work longer and elongating refresh cycles,” the report noted.