India’s public cloud market is heading into another phase of rapid expansion, with end-user spending projected to rise 28.1% to $17.5 billion in 2026 from $13.7 billion in 2025, according to Gartner. The latest forecast points to a market that is being shaped less by basic cloud migration and more by enterprise demand for AI-ready infrastructure, business agility, and long-term digital transformation.
The growth also reflects a broader shift in how Indian organisations are approaching cloud adoption. Rather than treating cloud as a standalone IT decision, enterprises are increasingly aligning it with outcomes such as faster innovation, improved customer experience, stronger resilience, and better control over technology costs.
AI-Ready Infrastructure Drives the Next Wave
A major driver behind this growth is the rising need for infrastructure that can support AI workloads at scale. Gartner says demand for GPUs, high-performance compute, high-speed networking, scalable storage, and always-on inference capacity is accelerating interest in infrastructure-as-a-service.
Infrastructure-as-a-service is expected to be the fastest-growing segment in India’s cloud market in 2026, with spending projected to rise 40% to $6.26 billion. Platform-as-a-service is also set for strong growth at 25.4%, reaching $6.41 billion, as enterprises rebuild their technology foundations to support AI-driven applications and real-time digital services.
PaaS Leads Enterprise Rebuild
Gartner says platform-as-a-service will remain the largest cloud spending category in India in 2026. That reflects a deeper shift in enterprise priorities, with companies moving beyond simple migration and into platform-led execution that can unify data, connect systems, speed up development, and support more intelligent digital experiences.
SaaS, meanwhile, is expected to grow more moderately at 18.9%, which Gartner attributes to its already mature adoption base. Many organisations are now rationalising licenses and reallocating budgets toward infrastructure and platform capabilities that are better suited to scaling AI and other advanced workloads.
Governance Becomes a Core Priority
As cloud environments become more complex, governance is becoming one of the biggest challenges for Indian enterprises. Gartner says hybrid, multicloud, and AI-enabled environments are creating new execution pressures, especially as organisations spread workloads across multiple platforms while trying to maintain control, security, and cost discipline.
The firm also expects a major shift by 2030, when more than 60% of enterprises will perform intensive AI model activity in one cloud while using data stored in another. That trend suggests cloud architecture will become increasingly distributed, making workload placement, governance, and FinOps maturity essential for success.
What Leaders Need Next
For I&O leaders in India, Gartner’s message is that cloud strategy now has to move from adoption to disciplined execution. That means investing in AI-ready data infrastructure, security-by-design, dynamic workload placement, and stronger governance across hybrid environments.
The organisations that can scale AI and digital initiatives while keeping costs, risk, and skills gaps under control are likely to outperform their peers. In Gartner’s view, cloud is no longer just a technology layer; it has become a business capability that increasingly determines how quickly enterprises can innovate and compete.
