India's technology services market is poised for significant expansion as AI adoption drives public cloud spending to an estimated $17.5 billion in 2026, marking a 28.1% year-on-year increase, according to a recent Equirus Securities report.
- Public cloud spending in India to grow 28.1% to $17.5 billion in 2026
- AI workloads projected to drive 70% of data center demand by 2030
- Private equity and mid-sized firms expanding India's Global Capability Centres
What happened
Equirus Securities projects that India's public cloud service spending will increase to approximately $17.5 billion in 2026, reflecting a 28.1% year-on-year growth driven largely by enterprises accelerating cloud and AI adoption. Infrastructure-as-a-Service (IaaS) and Platform-as-a-Service (PaaS) segments are expected to lead this expansion as organizations ramp up cloud-native applications and AI workloads.
The report highlights the growing demand for AI-capable infrastructure and the transition of AI initiatives from pilot phases to full production by 25% of enterprises, generating an estimated $10-12 billion in AI services revenue. This surge coincides with global trends projecting AI workloads to constitute around 70% of data center power demand by 2030.
Why it matters
India’s vast talent pool, cost advantages, and robust digital infrastructure are key enablers of this technology services growth, attracting significant private equity interest. PE firms are encouraging portfolio companies to establish Global Capability Centres (GCCs) that specialize in AI, engineering, analytics, and product development, thus expanding the country’s GCC ecosystem beyond major multinational corporations.
This broadening of India's GCC landscape enhances operational efficiency and value creation across enterprises, positioning the country as a global hub for AI-driven innovation. The strong AI-skilled workforce combined with deep enterprise expertise further solidifies India’s competitive stance in technology modernization and intelligent operations.
What to watch next
Monitoring how mid-sized and PE-backed companies continue to scale their Global Capability Centres will be critical, as their expansion could drive further diversification and acceleration of AI and cloud services in India. Observers should also track the evolution of cloud service segments like IaaS and PaaS, which are central to supporting AI workloads and enterprise modernization.
Additionally, global colocation data center developments and infrastructure investments aimed at AI readiness will be key indicators of how India’s technology ecosystem aligns with the expected near tripling of global data center demand by 2030. These dynamics will shape the country’s leadership in the increasingly AI-driven digital economy.