Global Tech Spending Faces Slowdown Amid Tariff Pressures

Highlights:

• Global tech spending in 2025 is now projected at US$4.9–US$5.7 trillion, falling short of the US$6 trillion mark due to tariff pressures.
• Gartner, Forrester, IDC, and Canalys have all trimmed forecasts, with growth expectations cut from nearly 10% to as low as 5.6%.
• The slowdown poses risks for India’s outsourcing industry, which relies heavily on global IT investment for growth.

Forecasts Lowered Across the Board

Global technology spending in 2025 is projected to fall short of the US$6 trillion milestone, with escalating trade tariffs weighing heavily on business confidence. Research firms including Canalys, Forrester, Gartner, and IDC have steadily downgraded their forecasts since tariffs emerged in bilateral trade discussions earlier this year. At the time of writing, the most optimistic outlook places global IT spending between US$4.9 trillion and US$5.7 trillion, implying growth of no more than 7%.

Tariffs Create Uncertainty

Analysts say the prolonged negotiations and shifting trade policies are discouraging large-scale investments in long-term technology projects. “Forrester’s estimates reflect a modest upward revision versus 2024, but ongoing trade disputes and tariffs add significant uncertainty, especially after the US-EU deal and developments in Asian markets,” said Biswajeet Mahapatra, Principal Analyst at Forrester.

Revised Estimates From Research Firms

Gartner has cut its January 2025 projection of 9.8% growth to 7.9%, now expecting global tech spending to reach US$5.43 trillion. Forrester is forecasting a 5.6% increase to US$4.9 trillion, following 4.6% growth in 2024. Canalys also reduced its outlook, trimming its forecast to US$5.35 trillion in spending — a 7% annual rise but lower than its previous expectation of 8.3%.

Implications for India’s Outsourcing Sector

The slowdown has direct implications for India’s outsourcing industry, one of the country’s most significant global success stories over the past three decades. With international firms tightening budgets, growth opportunities for Indian IT service providers could be constrained, even as they continue to play a critical role in the global digital economy.

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