End-user spending on public cloud services in India is forecast to grow 28.1 per cent to total $17.5 billion in 2026, up from $13.7 billion in 2025, according to Gartner, Inc, a business and technology insights company.
“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, Senior Principal Analyst at Gartner. “This is further fueled by rising demand for application modernization, digital sovereignty, digital service delivery and more scalable, consumption-based IT models, as organizations move toward more advanced and strategic cloud use cases.”
Infrastructure-as-a-service (IaaS) and platform-as-a-service (PaaS) are expected to be the fastest-growing segments in India’s cloud market, with IaaS projected to grow 40 per cent in 2026, followed by PaaS at 25.4 per cent.
“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,” said Banerjee.
PaaS is the largest spending category for Indian organisations in 2026 and is forecast to reach $6.4 billion, as enterprises rebuild their technology foundations to support AI-driven initiatives.
“Organizations 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, Senior Principal Analyst at Gartner.
SaaS is expected to exhibit more moderate growth in 2026.
“This reflects its established adoption base, as enterprises optimize licenses, rationalize usage and shift incremental spending toward infrastructure and platform capabilities required to scale workloads and operationalize AI at scale,” said Cheparthi.
Governance of increasingly complex hybrid, multicloud and AI-enabled environments is emerging as one of the most significant cloud challenges for enterprises in 2026.
Gartner predicts that by 2030, over 60 per cent of enterprises will perform intensive AI model activity in one cloud but leverage it with their data in another, up from less than 10 per cent today.
“Over the next 12-18 months, I&O leaders in India need to shift from cloud adoption to disciplined execution,” said Banerjee. “This includes prioritizing AI-ready data and infrastructure, stronger governance, FinOps maturity, security-by-design and dynamic workload placement across hybrid and multicloud environments.”
