New Delhi,  The Indian IT and business services market reached $7.15 billion and recorded a 7.4 per cent year-over-year (YoY) growth in the second half of 2022, compared to 6.4 per cent in the same period last year, an IDC report said on Tuesday.

The IT & Business Services market is projected to grow at a CAGR of 8.3 per cent between 2021-2026 and reach $20.5 billion by the end of 2026.

Of the IT and business services market, the IT Services market contributed 78.5 per cent and grew by 8.1 per cent in the first half, compared to the 7.3 per cent growth in 1H 2021.

"Despite the ongoing global economic crisis and the Russia-Ukraine conflict, the Indian IT services market recorded robust growth as enterprises continued to increase their IT service investments to improve resiliency, increase customer satisfaction, accelerate product development, etc," said Harish Krishnakumar, Senior Market Analyst, IT Services, IDC India.

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 to improve their overall security posture," Krishnakumar added.

According to the IDC, more than 60 per cent of Indian organisations plan to increase their budgets across all business and IT services contracted from professional service providers as a service provider can best support their business and IT.

"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 Neha Gupta, Senior Research Manager, Software and IT Services Market, IDC India.