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Publication date: 30 Nov 2023

India’s IT & Business Services Market Grew to US$7.14 Billion in 1H2023 Amid Economic Hurdles, Says IDC


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INDIA, 30 November 2023 – According to International Data Corporation's (IDC) Worldwide Semiannual Services Tracker, the Indian IT & Business Services market was valued at US$7.14 billion in 1H2023 and recorded a 6.3% year-over-year (YoY) growth as compared to 7.4% in 1H2022. The slowing in growth rate is due to the restraint in IT spending among Indian enterprises brought by macroeconomic headwinds.

“Indian enterprises invested in critical IT projects to gain quicker time to value in their key focus areas like enhancing customer experience, cybersecurity, and optimization of IT infrastructure and operations. Despite being cautious with IT services investments in the near term due to macroeconomic headwinds, Indian enterprises’ investments in the upcoming years will be fuelled by cloud, cybersecurity, and emerging technologies like Generative AI and 5G.” said Harish Krishnakumar, Senior Market Analyst, IT Services, IDC India.

Within the IT & Business Services market, IT Services contributed 78.9% and grew by 6.7% in 1H2023 compared to the 8.1% growth in 1H2022. The IT & Business Services market is projected to grow at a CAGR of 7.2% between 2022-2027 and reach US$ 19.59 billion by the end of 2027.

IDC classifies the IT & Business Services market into three primary markets – Project-Oriented, Managed Services, and Support Services. For 1H2023, project-oriented services registered the highest growth rate at 6.9%, followed by managed services at 6.0%, and support services at 5.3% respectively.

The sustained growth in hosted application management and infrastructure services highlights a growing preference among enterprises for transferring their workloads to datacenters and public clouds managed by service providers. An increase in demand for system integration services is driven by enterprises' ongoing focus on technologies such as hybrid cloud, AI/ML, analytics, and enhancing their cybersecurity measures.

“Indian organizations are strategically forging partnerships with third-party IT vendors to optimize the agility and efficiency of their infrastructure and application cloud management. They are also enthusiastically embracing the integration of AI and Generative AI into their operational frameworks to enhance efficiency notably in customer experience, code generation, and knowledge management. However, they remain discerning in their approach, prioritizing thorough evaluation of impact and ROI to ensure sustained cautious decision-making.” said Neha Gupta, Senior Research Manager, Software and IT Services Market, IDC India.

*All market size and growth percentage numbers are in constant currency.

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IDC Tracker  products provide accurate and timely market size, company share, and forecasts for hundreds of technology markets from more than 100 countries around the globe. Using proprietary tools and research processes, IDC's Trackers are updated on a semi-annual, quarterly, and monthly basis. Tracker results are delivered to clients in user-friendly excel deliverables and on-line query tools. The IDC Tracker Charts app allows users to view data charts from the most recent IDC Tracker products on their iPhone and iPad.

About IDC

International Data Corporation (IDC) is the premier global provider of market intelligence, advisory services, and events for the information technology, telecommunications, and consumer technology markets. With more than 1,300 analysts worldwide, IDC offers global, regional, and local expertise on technology, IT benchmarking and sourcing, and industry opportunities and trends in over 110 countries. IDC's analysis and insight helps IT professionals, business executives, and the investment community to make fact-based technology decisions and to achieve their key business objectives. Founded in 1964, IDC is a wholly owned subsidiary of International Data Group (IDG), the world's leading tech media, data, and marketing services company. To learn more about IDC, please visit Follow IDC on Twitter at @IDC   and LinkedIn. Subscribe to the IDC Blog  for industry news and insights.

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