BENGALURU: India's spending on public cloud services is expected to rise 28.1% to USD 17.5 billion in 2026 from USD 13.7 billion in 2025, driven by growing demand for artificial intelligence (AI)-ready infrastructure, application modernisation and digital transformation, according to Gartner.
The research and advisory firm said organisations across India are increasing investments in cloud technologies as cloud adoption becomes more closely linked to business objectives such as improving productivity, accelerating innovation, enhancing customer experience and strengthening resilience.
“Strong enterprise demand for AI-ready cloud infrastructure is redefining cloud investment priorities in India, driving the next phase of public cloud spending growth,” said Ashish Banerjee, Sr Principal Analyst at Gartner.
“This is further fueled by rising demand for application modernisation, digital sovereignty, digital service delivery and more scalable, consumption-based IT models, as organisations move toward more advanced and strategic cloud use cases,” he added.
According to Gartner, infrastructure-as-a-service (IaaS) and platform-as-a-service (PaaS) will be the fastest-growing segments of India's public cloud market in 2026.
IaaS spending is forecast to grow 40% to USD 6.26 billion in 2026 from USD 4.47 billion in 2025, while PaaS spending is expected to increase 25.4% to USD 6.41 billion from USD 5.11 billion.
“The rising need for AI-ready infrastructure, including GPUs, high-performance compute, high-speed networking, scalable storage and always-on inference capacity, is amplifying IaaS adoption and driving higher spending in this segment,” Banerjee said.
PaaS is projected to become the largest cloud spending category for Indian organisations in 2026 as enterprises rebuild technology foundations to support AI-driven initiatives.
“Organisations are accelerating adoption of AI-driven technologies to unify data, connect systems, speed up development and enable real-time digital interactions, driving PaaS growth beyond cloud migration toward platform-led execution,” said Arunasree Cheparthi, Sr Principal Analyst at Gartner.
Software-as-a-service (SaaS) spending is expected to grow at a slower pace, reaching USD 4.64 billion in 2026 from USD 3.9 billion in 2025.
“This reflects its established adoption base, as enterprises optimise licenses, rationalise usage and shift incremental spending toward infrastructure and platform capabilities required to scale workloads and operationalise AI at scale,” Cheparthi said.
