IT spending in India, including spending by enterprises, service providers, and consumers, is predicted to increase by 4.7% in 2023 to $86.7 billion, which is lower than the earlier forecast of 5.8% growth, according to a report by the Industrial Development Corporation (IDC).
“Expectations are that concerns around rising prices and higher inventory in the channel will persist until the first half of 2023, with an elongated recovery after that,” the report mentioned.
The IT spending by Indian enterprises and service providers is expected to grow by 7.8% in 2023.
However, consumer IT spending, dominated by purchases of devices like mobiles, tablets, PCs, wearables, and peripherals, is anticipated to grow by only 2.1% in 2023 due to rising prices.
Enterprises' immediate concerns are inflation-driven price increases, staffing shortages, IT supply chain constraints, and the impact of the weakening global economy on expected business revenues.
Domestic IT services spending is expected to grow by 8.7% in 2023, while software spending can grow by 15%, due to the rapid adoption of cloud-based services.
There has been a fluctuation in retail consumer demand due to high inflation. It has impacted the sales of mobiles, PC, notebooks, hardcopy peripherals and tablets. The sale of mobile phones declined in the 4th quarter of 2022 and the year witnessed the lowest shipment since 2019.
“Rising inflation and currency devaluations made technology investments costlier. But with worries around the weakening global macroeconomic situation, spending growth has moderated,” said Vinay Gupta, Research Director, IT Spending Guides, IDC Asia/Pacific.
The Reserve Bank of India forecasted a moderate increase in GDP in 2023 due to possible global economic slowdown and continued high oil prices, with recovery expected in 2024.
