India to be Biggest Tech Spender in APAC at ₹5 Trillion in 2025: Forrester
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India's technology spending is expected to reach INR 5 trillion (about USD 59 billion) in 2025, fuelled by strong enterprise investments, the government's push for digitalization, and a surge in venture capital funding, according to Forrester's latest Asia Pacific Tech Market Forecast 2024-2028.
Forrester initially projected that technology spending in the Asia Pacific (APAC) region would grow by 6.5 per cent in 2025 to reach USD 722 billion, up from USD 678 billion in 2024 and on par with the growth experienced last year.
The imposition of broad-based tariffs by the US, however, is expected to increase technology costs, disrupt supply chains, and dampen overall IT investments across the region. As a result, initial tech spending forecasts now appear optimistic, with heightened uncertainty expected to lower growth by 1 or 2 percentage points, depending on specific country exposure and IT spending categories.
Despite global volatility, adoption of AI and cloud will continue at a rapid pace and fuel robust spending growth on software and IT services in Asia. India, for example, was initially projected to see tech spending grow by 11 per cent. Although these figures may soften under the weight of tariff-related disruptions, India is still expected to outperform the regional average – driven by strong momentum in digital infrastructure and aggressive modernization agendas.
"India's technology landscape is entering an unprecedented phase of growth and innovation," said Ashutosh Sharma, VP and Research Director at Forrester. "With the country maintaining its position as the fastest-growing large economy and continuing its push for digitalization, we continue to anticipate robust tech spending growth of over 10 per cent annually. The rapid adoption of emerging technologies like generative AI will not only enhance productivity but also position India as a global leader in AI and tech talent.
"However, navigating workforce upskilling, regulatory frameworks, and potential tariff implications will be critical to harnessing AI-driven opportunities and ensuring sustainable economic growth. India's unique combination of a thriving digital ecosystem, demographic dividend, and strategic focus on innovation is set to drive significant contributions to both its economy and the global tech landscape," Sharma added.
According to Forrester, the software market is set to grow 10.4 per cent in 2025, with AI and cloud services dominating demand. Growth is especially pronounced in Southeast Asian economies, where digital transformation programs are advancing rapidly. Meanwhile, the IT services category is expected to grow by 6 per cent, propelled by rising demand for hybrid cloud solutions, cybersecurity consulting, and system integration to manage increasing regulatory complexity. While these forecasts were established prior to the latest tariff developments, Forrester believes that the fundamental drivers of growth – AI, cloud, and digital infrastructure – remain intact.
In 2025, Forrester projected Australia's tech spending to grow 6.6 per cent to nearly USD 52.4 billion driven by investments in cybersecurity, generative AI, and cloud solutions. China's tech spending is expected to grow 7.7 per cent to USD 264 billion with government initiatives set to boost consumption, bolster economic recovery, and improve technological self-reliance. Singapore tech spend is likely to grow 5.6 per cent to USD 19 billion with AI rapidly gaining traction across key sectors and the government's implementation of the Digital Connectivity Blueprint to improve Singapore's digital infrastructure.
The sentiment is strong in Southeast Asia with tech spending in 2025 expected to grow by 8.5 per cent in Indonesia, 7.2 per cent in Malaysia, 9.4 per cent in the Philippines, 7.7 per cent in Thailand, and 10 per cent in Vietnam, totalling approximately USD 69 billion. The strong growth is due to Southeast Asian governments actively promoting digitization and a growing focus on cybersecurity, with AI playing a key role in enhancing threat detection and online safety.
"Asia Pacific's tech spending growth continues to demonstrate the region's commitment to leveraging technology to build resilience and drive innovation in an uncertain global climate," said Frederic Giron, VP and Senior Research Director at Forrester. "But the immediate economic headwinds and heightened uncertainty stemming from the new tariffs are likely to influence the pace, prioritization, and funding of technology initiatives in the coming months. Business and tech leaders must engage in comprehensive scenario planning to anticipate various outcomes and develop adaptive strategies that ensure organizational resilience."
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