Indian IT Services market grew 8.1% during the first half of 2022: IDC

By Daisy On Nov 16, 2022

The IT services market grew by 8.1% in the first six months (H1) of 2022, compared to the 7.3% growth in the same duration last year, according to the International Data Corporation’s (IDC) Worldwide Semi-annual Services Tracker. The Indian domestic IT and business services market was valued at $7.15 billion and recorded a 7.4% year-over-year (YoY) growth compared to 6.4% in H1 of 2021.

IT services comprised 78.5% of this value. The higher growth rate is due to the continuing rise in digital transformation investments among Indian enterprises.

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.

“Despite the ongoing global economic crisis and the Russia-Ukraine conflict, the Indian IT services market recorded robust growth as enterprises continued to increase their IT service investments to improve resiliency, increase customer satisfaction, accelerate product development, etc.,” said Harish Krishnakumar, Senior Market Analyst, IT Services, IDC India.

The IT & Business Services market is projected to grow at a compound annual growth rate (CAGR) of 8.3% between 2021-2026 and reach $20.5 billion by the end of 2026.

IDC classifies the IT & Business Services market into three primary markets – Project-Oriented, Managed Services, and Support Services. For H1 2022, project-oriented services registered the highest growth rate at 8.1%, followed by managed services at 7.3%, and support services at 6.0% respectively.

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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, he added. 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.

“Traditional organizational boundaries are getting blurred with organizations adopting advanced technologies for seamless experiences and resiliency. Organizations are transforming their operating models to keep up with the changing business landscape and as a result demand for IT services is like never before,”said Neha Gupta, Senior Research Manager, Software and IT Services Market, IDC India.

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