According to Gartner, Inc., end-user spending on public cloud services in India is forecast to grow 28.1% to total $17.5 billion in 2026, up from $13.7 billion in 2025. As reported by Gartner, this growth is driven by strong enterprise demand for AI-ready cloud infrastructure and application modernization initiatives across the country. Ashish Banerjee, Senior Principal Analyst at Gartner, explained that "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." The report indicates that cloud adoption is becoming more tightly aligned with business goals, such as improving productivity, accelerating innovation and go-to-market speed, enhancing customer experience and strengthening business resilience, which is sustaining strong momentum in cloud investments across the country.
Infrastructure-as-a-service (IaaS) is expected to be the fastest-growing segment, with projections of 40% growth in 2026, followed by platform-as-a-service (PaaS) at 25.4%. According to Gartner's analysis, 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. Arunasree Cheparthi, Senior Principal Analyst at Gartner, noted that "organisations 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."
PaaS is projected to reach $6.4 billion in 2026, making it the largest spending category for Indian organizations. As reported by Gartner, enterprises are rebuilding their technology foundations to support AI-driven initiatives, with organisations 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. This trend reflects the maturation of cloud adoption beyond basic infrastructure to more sophisticated platform capabilities required for AI workloads.
SaaS is expected to exhibit more moderate growth in 2026, reflecting 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. According to Gartner's analysis, this moderate growth pattern indicates the maturation of SaaS adoption in the Indian market, with organizations focusing on optimizing existing investments while investing in the infrastructure and platforms necessary for AI-driven transformation.
Gartner predicts that by 2030, over 60% of enterprises will perform intensive AI model activity in one cloud but leverage it with their data in another, up from less than 10% today. The governance of increasingly complex hybrid, multicloud and AI-enabled environments is emerging as one of the most significant cloud challenges for enterprises in 2026. As reported by Gartner, I&O leaders in India need to shift from cloud adoption to disciplined execution over the next 12-18 months, prioritizing AI-ready data and infrastructure, stronger governance, FinOps maturity, security-by-design and dynamic workload placement across hybrid and multicloud environments.
