Despite the ongoing global economic crisis, the Indian IT services market grew by 8.1% in the first half of 2022 compared to the 7.3% growth in the first half of 2021 contributing 78.5% to the IT & business services market.
India's domestic IT & business services market was valued at $7.15 billion and recorded a 7.4% YoY growth compared to 6.4% in the first half of 2021, according to the International Data Corporation (IDC).
It recorded robust growth as enterprises continued to increase their IT service investments to improve resiliency, increase customer satisfaction, accelerate product development, and other services.
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. 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
IDC classifies the IT & Business Services market into three primary markets – Project-Oriented, Managed Services, and Support Services. For the first half of 2022, project-oriented services registered the highest growth rate at 8.1% driven by the demand for system integration services, and the rise in demand for IT consulting, followed by managed services at 7.3%, driven by the increased demand for hosted application management and hosting infrastructure services caused due to the rising adoption of cloud and colocation services, and support services at 6.0% respectively.
The outlook for the IT & Business Services market is strong growth in the upcoming years. It is projected to grow at a CAGR of 8.3% between 2021-2026 and reach $20.5 billion by the end of 2026 as enterprises are expected to continue with their digital transformation investments.