New Delhi, June 24 : The IT and Business Services market in India is projected to grow at a CAGR of 7.3 per cent to reach $20.7 billion by the end of 2028, a report showed on Monday.

Last year, the domestic IT & Business Services market was valued at $14.5 billion and clocked a 6.1 per cent year-over-year (YoY) growth as compared to 7.4 per cent in 2022, according to International Data Corporation (IDC).

The moderation in growth rate is due to Indian enterprises remaining cautious of their IT spending due to volatile macroeconomic conditions, it noted.

Indian enterprises focused on cost optimisation while prioritising IT projects with quicker returns.

They continued to invest in areas like enhancing customer experience and improving operational efficiency to gain a competitive advantage by leveraging technologies like cloud, analytics, and AI/ML.

'In the coming years, IT service investments will be driven by interest in GenAI. Enterprises will continue engaging with IT service providers to develop potential use cases and POCs and also to transform and manage their complex IT infrastructure and applications,' said Harish Krishnakumar, senior market analyst, IT Services, IDC India.

In the IT and Business Services market, the IT Services market contributed 78.4 per cent and grew by 6.6 per cent in 2023, compared to the 8.1 per cent growth in 2022.

'The industry today is incredibly dynamic, driven by the advent of AI and GenAI, prompting enterprises to rigorously examine use cases to ensure the delivery of measurable business outcomes,' according to Neha Gupta, senior research manager, Software and IT Services Market, IDC India.

/IANS