Indian IT Services Market Grows by 8.1% in the 1H2022

The Indian domestic IT & business services market saw a 7.4 percent YoY growth in 1H2022 (Jan-Jun) compared to 6.4 percent in 1H2021. The market was valued at 7.15 billion in 1H2022 as per the recent IDC Worldwide Semi-annual Services Tracker.

The market witnessed a higher growth rate due to the continuing rise in digital transformation investments among Indian enterprises.

“The Indian IT services market recorded robust growth, despite the ongoing global economic crisis and the Russia-Ukraine conflict, as enterprises continued to increase their IT service investments to improve resiliency, increase customer satisfaction, accelerate product development, etc. Harish Krishnakumar, Senior Market Analyst, IT Services, IDC India highlighted that apart from digital transformation initiatives, there is also a rise in discretionary spending, as IT investments put on hold due to the pandemic have resumed. With investments in the cloud continuing to rise, enterprises also continue investing in data analytics and AI/ML for better decision-making and IT security to improve their overall security posture.

In the IT & business services market, the IT Services market contributed 78.5 percent and grew by 8.1 percent in 1H2022 compared to the 7.3 percent growth in 1H2021. Further, as per IDC, the IT & Business Services market is poised to record strong growth in the upcoming years, as enterprises are expected to continue with their digital transformation investments and will not face a considerable impact due to the economic slowdown. The IT & Business Services market is projected to grow at a CAGR of 8.3 percent between 2021-2026 and reach $ 20.5 billion by the end of 2026.

For 1H2022, project-oriented services registered the highest growth rate at 8.1 percent, followed by managed services at 7.3 percent, and support services at 6.0 percent respectively.

The managed services market is driven by the increased demand for hosted application management and hosting infrastructure services caused due to the rising adoption of cloud and colocation services. The project-oriented services market is driven by the demand for system integration services, and the demand for IT consulting services is also on the rise as enterprises try to ensure their IT investments are aligned with their desired business outcomes.