An Outlook at India's IT Spending in the Post-GST Era through the Lens of Gartner

CIOReviewIndia Team | Tuesday, 12 November 2019, 14:01 IST

An Outlook at India's IT Spending in the Post-GST Era through the Lens of GartnerAccording to a recent forecast by Gartner, IT spending in India is expected to reach USD 94 billion in 2020 from USD 88.5 billion in 2019, with a growth rate of 6.6 percent, driven by enterprise application software which is set to grow 17 per cent in 2020. Analysts from Gartner are discussing the macro economic trends that are affecting the IT spending in India at the Gartner IT Symposium/Xpo- 2019, Goa. The symposium tries to explore the technology, insights and trends shaping the future of IT and business. “2020 will be a rebound year for India’s IT spending as consumers return to purchasing mobile phones after sitting on the sidelines in 2019,” said John-David Lovelock, research vice president at Gartner.   

Mobile Device Segment To Lead The Growth

Sales of mobile phones in India have seen a decline of 2.3 percent in 2019, with customer’s reluctance to upgrade from feature phone to Smartphone. Interestingly, the rapid increase in overall IT spending will help drive sales by 16 per cent in mobile phone segment in 2020, thereby driving growth in the devices market up to 6.3 per cent.  "Over half of India's total IT spending is done by consumers, so it was expected that a dip in consumer spending would have tremendous impact on total IT spending," says Lovelock. Consumer resistance to invest in the mobile devices has largely impacted overall IT spending in the country in 2019 in spite of the rate-cuts from popular brands. However, the scenario in 2020 is going to change, opines Lovelock.  

Businesses Show Better Resilience To Economic Slowdown

As per Arup Roy, Research Vice President at Gartner, the IT spending in India in the next two to three years will increase with policies supporting consumer spending come into practice along with boost from economy benefits post the GST implementation. Contrary to the general perception India’s economic slowdown has show no negative impact on IT business, which holds a key portion of the country’s economy. Despite the economic slowdown, businesses showed better resilience and continued to invest in the IT, says Arup Roy.

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