India’s IT Spending to Outpace Global Growth in 2026: Report
Despite increased IT investment, a significant gap remains between spending and realized business value.
Topics
News
- Global AI Use Rose in Early 2026 as Asia Led Adoption Growth
- AI Dispatch | 1–7 May 2026
- OpenAI Pushes Beyond Chatbots With Real-Time Conversational AI Models
- IndiaAI, ICMR Partner to Build AI Healthcare Ecosystem
- India’s IT Spending to Outpace Global Growth in 2026: Report
- Meta to Scan Photos for Height and Bone Structure to Spot Underage Users
Indian enterprises are accelerating technology modernization efforts, with IT spending projected to rise 6–8% in 2026. This outpaces the global average of 4%–6%, even as most business leaders remain unconvinced about the value generated by those investments.
According to Bain & Company’s “India Enterprise Technology Report 2026,” nearly 50–60% of enterprise technology budgets in India will be directed toward capital expenditure, signaling a major push toward infrastructure and systems upgrades.
However, the report shows that only 15% of business leaders see current IT spending as truly strategic, underscoring the gap between rising investment levels and the measurable business value they deliver.
The report suggests that leaders should measure tech investments by results linked to growth, efficiency, and profit, rather than just completion milestones.
AI is now the main focus, with about 40% of tech budgets going to AI and related change initiatives.
Sandeep Nayak, Partner and APAC Leader of the Technology Practice at Bain & Company, said that despite record investments in technology, many organizations still struggle to fully realize its value. This challenge is largely due to misalignment between business and IT, gaps in data and AI foundations, and outdated operating models.
The report suggests that technology spending has accelerated over the past 12–18 months and will continue for the next 2–3 years, underscoring a structurally stronger investment cycle.
The report is based on insights from more than 250 technology and business leaders across enterprises in India, spanning multiple industry segments. It further suggests that about 60% of CIOs will prioritize high-impact AI roadmaps, application rationalization, and data modernization in the next 12 months. These priorities signal a clear shift toward strengthening core technology foundations.
It highlights that Indian enterprises are allocating a significantly higher share of their budgets toward long-term capability building.
These investments are primarily directed toward AI platforms and data modernization (30% of capex), core application modernization (25%), cloud and IT infrastructure (25%), and cybersecurity (20%). This reflects a clear pivot toward strengthening foundational capabilities.
“At a time when AI is accelerating change, it is no longer only about modernizing technology stacks or addressing technical debt. Now is the time to reimagine the enterprise, zero-base processes, redesign operating models, and architect an AI and technology real estate that can expedite the journey,” added Nayak.
He added, “The winners will be those who shift to an outcome-led approach, where technology is measured by its impact on the business, not just delivery milestones.”
Cybersecurity modernization also emerged as a core focus for roughly half of the CIOs surveyed, reflecting the need to enable secure and scalable AI deployment.
Listing roadblocks to full-scale technology-led transformation, approximately 72% of CIOs cite legacy tech debt as the top barrier. This is followed by skill shortages in next-gen domains (57%) and unproven ROI from new-age tech initiatives (49%).
About 90% of leaders believe current data and AI capabilities can’t support enterprise-scale scaling.
Leading organizations are already seeing meaningful impact. They have the potential to achieve an absolute EBITDA improvement of 15%-20%, driven by revenue growth and efficiency gains.
Nagaraj Gn, Partner & Head of India Enterprise Technology, Bain & Company, cautioned that an incremental step-change approach to technology strategy will not deliver maximum impact from AI investments.
Nagaraj Gn said, “Technology CXOs must urgently rethink their technology architecture, governance, operating model, skill mix and IT partner engagement models with a ‘future-back’ approach. Take decisive steps to fix data platforms more effectively and drive execution with IT partners to achieve measurable business outcomes, not just software delivery milestones.”
