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India’s Tech Expenditure Projected To Grow 8.7% in 2022

Last Updated : 22 Sep, 2023
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Synopsis: Forrester in its recent report “Asia Pacific Tech Market Outlook By Country For 2021-2022” says that the Indian tech expenditure is projected to climb by 8.7% in 2022.

“A substantial decrease in the Covid patient numbers and developments made on the Covid vaccine led to an acceleration in the economic functions during the last 6 months of 2021. This occurred successfully even though the second wave of Covid-19 had deteriorated India’s recovery in early 2021. All the things considered, i.e. energy deficiencies, soaring inflation rates, and a potential re-emergence of the virus can result in an uneven recovery,” the report informed.

In the more extensive Asia Pacific area, Forrester anticipates that “constant improvement in vaccination rates and the gradual reopening of economies” will promote technology market expansion in 2022, at a standard or higher than the growth rate they recorded prior to the pandemic. 6.2% is the rate at which the APAC tech market is expected to surge in 2022 in terms of USD, with the best growth potential in China and Southeast Asia (besides India).

According to the Forrester forecast in 2021, the general APAC technology market rose by 6.4% while tech spending in India rose by 9.8%.

“Tech equipment expenditure rose in 2021 whereas software had an admirable growth curve in the general technology market. Subsequent to bringing down the hardware expenditure in 2020, Indian tech giants will probably increase it by 7% more in 2021. The communication hardware saw a solid 6.9% soar in 2021 with telecoms increasing their investments in 5G. The software was the single spending class that didn’t endure a huge blow during the 2020 shrinkage, and we anticipated its growth to leap to almost 15% in 2021”, Gartner said.

“In 2022, India’s expenditure rate on software is estimated to grow at 14.6%, marginally lesser than 14.8% assessed in 2021, followed by IT outsourcing which is estimated to grow 11.2%. The consulting services in IT are estimated to rise 9.8% in 2022.”

“Tech outsourcing and tech counseling are forecasted to progress with their swift growth in 2022 as tech leaders continue IT consulting deals, transformation initiatives, and reboot delegation,” according to the report.

Following 2021’s expenditure rush, growth in equipment and communication hardware will plunge from 6-7% in 2021 to 4-5% in 2022 as per the report.

“A higher demand is expected in automation in business operations, infrastructure innovation, and consulting offerings. We likewise expect Indian companies to strive for the assistance of third-party IT service providers to establish DevOps, agile development, continuous integration, and delivery abilities,” it said.

“India is optimistic with regards to the digitization and the various employment opportunities it’ll eventually bring to the table. India’s new privatization amendment roadmap in various segments, including financial institutions and aeronautics, should offer funds required to revamp the economy and encourage infrastructure expenditure. This push towards privatization has contributed to the bullish state of mind in tech investment,” it added.

According to another news report, Indian CIOs Must Make Future Fitness A Strategic Imperative, the aim to spend on IT across corporate India rose higher in 2021 than the global approximate rate. This is due to organizations’ prime emphasis on “profit growth, market performance, and pragmatism”.

Forrester had issued another survey in 2021 that was held from the period of November 2020 to January 2021. This internet-based survey consisted of 21,130 respondents from the UK, the US, France, Australia, China, Canada, and Germany from organizations with at least two or more workers.

In the survey, 53% of Indian purchase influencers mentioned that their organization spent more on tech items and services in 2020 than in 2019, while 75 percent said their organization would spend more in 2021 than in 2020. 42% of the respondents anticipated the spending to rise by 5-10%.

“Accelerated innovation leveraging technologies like analytics and cloud with an emphasis on development were the things on which the CIO plans were categorized,” the report informed.

Moreover, interest in rising technologies and automation has also attained a great height.

“Automation processes and AI abilities nurturing various efficiencies in the business, have prodded organizations to transition towards technology. This denotes a significant digitization achievement and a more extensive forcing function for process modernization across the environment,” it added.

Even Gartner has forecasted the spending of the Indian IT sector to climb to $105.2 billion in 2022, a rise of 5.5% from 2021. The global IT expenditure is expected to have a combined value of $4.5 trillion, a 5.1% increase from 2021.

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