COVID-19 To Result In India’s Slowest Tech Spending Growth In Past Decade; Could Contract By Up To 4.8%
At the start of 2020, India’s economy was struggling to shake off the impact of recessionary risks due to growing protectionism in the West and the US-China trade war. While the country’s GDP growth of nearly 6% was low for India, it was still on track to achieve Forrester’s 2019 prediction of 7% tech spending growth in 2020.
And then COVID-19 happened. In a new report by VP and Research Director Ashutosh Sharma, Forrester forecasts that in 2020, India will have the slowest tech spending growth in at least a decade on account of sharp economic disruption due to the global pandemic.
In the best case, tech market growth will slow to 1.2% in 2020 and jump back to 8.4% in 2021. This scenario becomes less likely if India’s major economic hubs remain under strict lockdown
beyond June 2020. The other scenario is worse: Tech spending might contract by up to 4.8% in 2020 with only a mild recovery, to 1.4% growth, in 2021.
Success will come to those that achieve the dual objectives of managing costs and selectively investing in making their operating models more adaptive. To achieve these complementary objectives, we expect CIOs in India will:
- Prioritize activities based on the severity of the pandemic impact
- Invest in employee safety and remote work enablement
- Drive customer-centric investments to chase growth
- Focus on adaptability via digital initiatives
- Reduce spending on large transformational initiatives
Ashutosh Sharma is available to discuss the forecast and to provide additional insights on India’s tech market outlook.