India to clock highest growth in tech spending in 2024 in APAC: Report

Tech economy 'enjoys strong growth' due to digitisation push by central and state governments, it says

India’s technology spending this year is estimated to grow by 8 per cent – the highest in Asia Pacific (APAC), said a report on Wednesday.

India’s technology spending will reach around $54.5 billion (around Rs 4.49 trillion), according to Forrester’s ‘Asia Pacific Tech Market Forecast, 2023 to 2027’.

“India’s domestic tech economy continues to enjoy strong growth due to an all-round digitisation push from the central and state governments,” said the report.

Technology spending in APAC will grow at a compound annual growth rate (CAGR) of 6.4 per cent to 7.4 per cent per year from 2024 to 2027, reaching $876 billion in 2027.

 

Spending on software will continue its rapid growth over the next few years. It will be followed by spending on information technology (IT) services, communications equipment, and computers. The share of software purchases will climb from 26.4 per cent in 2024 to 30 per cent of total technology spending in 2027, outpacing the other IT categories due to demand generated by artificial intelligence and AI-augmented enterprise software and services.

After India, Singapore in APAC will this year see the second highest growth in technology spending at 5 per cent, reaching $18 billion.

Australia’s technology spending will grow by 4 per cent and China by 2 per cent. China has the largest technology spending – in absolute terms – APAC at $261.9 billion.

Technology spending in six major Southeast Asian economies (Indonesia, Malaysia, Philippines, Thailand, Taiwan, and Vietnam) will hit $74 billion in 2024, representing a 1 per cent growth. Uptick in digital consumption spurred by large millennial and Generation Z populations, favourable policies, and investments by technology giants will accelerate digital innovation, said the report.

“While challenges such as regulatory environments, global economic conditions, and talent shortages in the region present hurdles, overall, the APAC market is well-positioned for tech growth,” said Leslie Joseph, principal analyst at Forrester. “As the region continues to grow in importance in the tech world, new opportunities offered by the explosion of AI and the increased demand for cloud can be significant revenue and growth drivers for firms.”