Strong growth is expected in 2026 as enterprises accelerate AI adoption, digital modernization, and investment in scalable cloud infrastructure.
India public cloud spending 2026 is poised for rapid growth, with end-user spending in the country expected to increase 28.1 percent to $17.5 billion in 2026 from $13.7 billion in 2025, as per Gartner, Inc., a business and technology analytics firm.
The expansion is indicative of a swift change in business goals, especially as companies make more investments in advanced digital platforms and AI-based infrastructure. According to Gartner, as companies prioritize agility, creativity and operational resilience, demand for scalable, consumption-based IT models is driving cloud adoption across industries.
Cloud investment priorities in India are changing due to strong enterprise demand for AI-ready cloud infrastructure, according to Ashish Banerjee, Senior Principal Analyst at Gartner. This change, he continued, is influencing the next stage of the nation's rise in public cloud spending.
The data indicates that growing demands for enhanced digital service delivery, digital sovereignty and application modernization are contributing to cloud expansion. Also, businesses are shifting toward more strategic cloud use cases, where cloud platforms closely match key business goals including increased productivity, quicker innovation cycles, better customer experiences and improved business continuity.
The growing demand for AI-focused infrastructure, such as GPUs, high-performance computing systems, fast networking and scalable storage, is a major growth driver. As businesses become ready for massive AI workloads and real-time inference capabilities, this requirement is greatly accelerating the adoption of Infrastructure-as-a-Service (IaaS).
IaaS is expected to grow at the quickest rate in India's cloud industry by 40% in 2026, followed by Platform-as-a-Service (PaaS) at 25.4 percent, as per Gartner. As businesses rebuild their technological foundations to accommodate AI-based development and platform-led execution, PaaS is predicted to continue to be the leading spending category, reaching $6.4 billion.
According to Arunasree Cheparthi, Senior Principal Analyst at Gartner, organizations are adopting AI-focused solutions more quickly in order to integrate systems and unify data. According to her, this change is propelling PaaS expansion beyond conventional migration in the direction of increasingly integrated, real-time digital ecosystems.
In contrast, software-as-a-service (SaaS) is expected to develop at a relatively moderate rate in 2026. As per Gartner, this is because AI is already widely used; enterprises are now optimizing licenses and reallocating funds to platform and infrastructure investments that are necessary to scale AI workloads efficiently.
Overall, the projection highlights a structural shift in India's cloud environment, with AI emerging as the key factor influencing enterprise IT spending priorities.
Thus, Business Fortune is of the view that India’s cloud growth signals strong AI-driven enterprise transformation and long-term digital expansion ahead.
