India’s public cloud spending set to reach $17.5 billion in 2026

MUMBAI: The cloud is getting heavier and artificial intelligence is carrying much of the weight. India’s spending on public cloud services is projected to surge to $17.5 billion in 2026, up 28.1 per cent from $13.7 billion in 2025, as enterprises ramp up investments in AI-ready infrastructure and digital transformation initiatives, according to Gartner. The forecast highlights how artificial intelligence is rapidly reshaping technology spending priorities, pushing businesses beyond basic cloud migration towards more sophisticated and strategic deployments.

According to Gartner, organisations are increasingly investing in cloud infrastructure capable of supporting AI workloads, advanced analytics and real-time digital services. The shift is also being driven by growing demand for application modernisation, digital sovereignty and flexible consumption-based IT models.

Among all cloud segments, Infrastructure-as-a-Service (IaaS) and Platform-as-a-Service (PaaS) are expected to lead growth in 2026. IaaS spending is forecast to jump 40 per cent to $6.26 billion, while PaaS spending is expected to rise 25.4 per cent to $6.41 billion, making it the largest cloud spending category in the country. Software-as-a-Service (SaaS) spending is projected to reach $4.64 billion, growing 18.9 per cent year-on-year.

The surge reflects the growing need for AI infrastructure, including graphics processing units (GPUs), high-performance computing, high-speed networking and scalable storage systems. As companies move from AI experimentation to deployment, cloud platforms are becoming the foundation on which those ambitions are built.

Gartner noted that PaaS is increasingly emerging as the preferred layer for enterprises seeking to connect data, accelerate development cycles and enable AI-driven digital experiences. Rather than simply supporting cloud migration, platform services are now becoming central to business execution.

Meanwhile, SaaS growth is expected to remain comparatively moderate as enterprises optimise software licences and redirect fresh spending towards the infrastructure and platform capabilities needed to support large-scale AI adoption.

The research firm also flagged governance as a growing challenge. As organisations expand across hybrid, multicloud and AI-enabled environments, managing data, security, costs and compliance is becoming increasingly complex.

Looking ahead, Gartner predicts that by 2030 more than 60 per cent of enterprises will run intensive AI model activity in one cloud environment while relying on data stored in another, a dramatic leap from less than 10 per cent today.

The forecast suggests India’s cloud market is entering a new phase. The conversation is no longer about whether to move to the cloud, but how to build smarter, faster and more resilient businesses once there. And with AI becoming the engine of that transformation, cloud spending is showing no signs of coming back down to earth.