Tech spending in India is expected to grow by 9.6 per cent in 2023, attaining pre-pandemic levels according to a report by Forrester. This rate of growth is much higher than the 2 per cent increase in tech spending seen in 2022.

The Forrester report claimed that Indian tech spending will grow at a much faster pace in the next few years, 2023 will be a bounce-back year of IT spending, and 2024 is expected to be much better.

Last year, tech spending only grew by 2 per cent affected by the sharp fall in the value of the rupee, although factors like geopolitical uncertainty, fluctuating oil prices, and the Ukraine war also contributed. However, given that India still spends a small portion of its GDP on technology spending — analysts expect recovery to be at a faster pace.

The Forrester report predicts tech outsourcing and hardware maintenance will see sharp growth. Indian companies are moving from a 100 per cent-owned IT model to a project-based outsourced model as new technologies capture the imagination of consumers and businesses.

Telecom will see major investments as well with the onset of 5G and the growing popularity of applications in Web 3, metaverse, and IoT.

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A report by Crisil on Friday found that “the information technology (IT) services sector in India will see revenue growth decline by 700-900 bps to 10-12 per cent in fiscal 2024 amid global macroeconomic and financial sector headwinds in key markets.”

In the previous years, the IT services industry has grown by 18-20 per cent in fiscal 2023 and 19 per cent in fiscal 2022. However, headwinds in key markets, especially the BFSI segment in the US and Europe, will affect the revenue growth of domestic IT services companies in fiscal 2024.

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