Domestic IT services market grew by 7.9% in 2021 led by digital transformation deals: IDC

Bengaluru: The Indian domestic information technology and business services market has recorded a 7.2% year-over-year growth to at $14.15 billion in calendar year 2011 as compared to 5.3% in 2020, according to global IT market intelligence firm International Data Corporation. The increase in growth rate is due to the rise in digital transformation initiatives among clients across the country.

Of the IT and business services market, the IT Services market contributed 77.6% and grew by 7.9% in 2021 compared to the 5.8% growth in 2020. The market is expected to witness a robust growth in the upcoming years as enterprises continue to invest in areas like cloud, artificial intelligence, machine learning, security and application modernization, the report said.

The IT and business Services market is projected to grow at an annualized rate of 8.9% between 2021-2026 and reach $21.67 billion by the end of 2026.


"The surge in digital transformation initiatives among Indian enterprises continued in 2021 as enterprises continued to increase their IT investments to improve the resiliency and efficiency of their business operations and enhance customer experience. With the economy gradually recovering from the impact of the COVID-19 pandemic, there will be an increase in IT services spending in the upcoming years due to the pent-up demand caused due to the pandemic and also due to rising discretionary IT spending in certain industries," said Harish Krishnakumar, senior market analyst, IT Services, IDC India.

IDC classifies the IT and business services market into three primary markets – project-oriented, managed services, and support services. For 2021, project-oriented services registered the highest growth rate at 7.9%, followed by managed services at 6.9%, and support services at 6.2% respectively

"IT services providers continued to build capabilities on digital technologies through solution and platform centric approaches. Areas like cloud and security continued to see momentum along with automation and artificial intelligence. We see this trend continuing as Indian enterprises will look up to their service providers as they progress towards their goal of becoming a future-enterprise," said Sharath Srinivasamurthy, research director (Enterprise Solutions and ICT Practices), IDC India.