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Cloud computing will account for 8% of India’s GDP in 2026, reports NASSCOM

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Cloud computing

Cloud computing will account for approximately 8% of India’s GDP in 2026 growing by four times to reach up to USD 380 billion in 2026. Major sectors that will contribute to this growth are financial services, communication, media and entertainment, and industries like manufacturing and natural resources, aviation, chemicals, construction, metals and mining. The cloud also has the potential to create 14 million jobs in 2026.

Benefits of cloud adoption include:

  • Ability to quickly launch new product/service
  • Enhanced customer engagement and experience
  • Cost optimization and saving

Hurdles to cloud adoption in India include:

  • Insufficient understanding of cloud features and benefits
  • Migration and integration of legacy systems, applications
  • Lack of in-house talent to drive transformation

Impact of cloud opportunity in India

Cloud opportunity in India will impact GDP, employment, innovation and entrepreneurship, and technology prowess.

Impact of cloud on GDP

By 2026, the cloud will have become a major contributor towards India’s GDP growth.

The direct impact of cloud on GDP

  • Direct contribution of cloud to GDP can reach US$40-50 billion in 2026.
  • This growth will be driven by the increasing demand for cloud services across end-user industries. Export of cloud services and solutions by system integrators and SaaS providers will also contribute to GDP growth.

The indirect impact of cloud on GDP

  • Indirect impact on the GDP can reach US$265-340 billion in 2026 by the contribution primarily from value added by end-user industries, supply chain activities, and spending of workforce’s income.

impact of cloud on GDP

Potential GDP contribution of cloud across sectors in 2026

Impact of cloud on employment

Cloud has the potential to create 14 million jobs in 2026. Cloud can generate direct and indirect employment opportunities through various avenues.

Direct employment

  • Cloud can generate direct employment opportunities reaching 4.1 million in 2026 from 1.3 million in 2021.
  • Key jobs include cloud software development, cloud architecture, cloud security, cloud infrastructure, and cloud operations, and supporting job roles in sales, finance, admin, and human resources.
  • Cloud-related core job families can account for almost 75–80% of total direct employment.
  • Service providers will create 70-75% of the direct employment opportunities. System integrators are expected to drive the demand within service providers because of their presence across the customer life cycle.

Indirect employment

  • Cloud can generate indirect employment opportunities of 9.8 million in 2026 from 3.4 million in 2021
  • Demand for indirect employment comes from ancillary industries such as real estate, transportation, hospitality, and retail.

employment opportunities

Direct employment opportunities for core cloud roles by 2026

Impact of cloud on innovation and entrepreneurship

The cloud is the foundational pillar for innovation and collaboration. It supports startups and SMBs in innovation by providing access to high-end technologies used by larger organizations with lesser investments. Technologies like machine learning (ML), Artificial Intelligence (AI), and robotic process automation (RPA) have become increasingly accessible to businesses.

Cloud services will also accelerate R&D in India.  More organizations are leveraging the benefit of cloud-based data platforms to enable high-end storage, computation capabilities, and collaborative research. Cloud services come in handy particularly for virtual experimentation at scale without being constrained by resource availability. Cloud adoption can improve India’s Global Innovation Index (GII) by increasing the scores across select indicators.

“With cloud, startups no longer need to worry about the tech logistics of their business but instead focus on the business problems to solve for.”Technology head, Agritech startup.

startup

Indian startup ecosystem powered by the cloud

Impact of cloud on technology prowess

Cloud adoption will enable India to build the technology capabilities required for the digital transformation journey. It will transform India into a global hub for cloud services and talent. India-based cloud services will be able to offer low-cost, high-quality services to the global market.

Indian companies are heavily investing to expand their global footprint and enhance their global delivery centers. SaaS will act as the key driver of export from India. The share of global revenue for SaaS companies is expected to increase from 70% to up to 85% in the next five years.

Image and source credits: NASSCOM

Read next: 6 ways IT leaders can tackle the growing software engineering skills shortage

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