India is poised to lead technology spending in the Asia Pacific region in 2025 even as new US tariffs threaten to slow overall growth, according to the revised forecast from research firm Forrester. The country’s tech expenditure is projected to reach $59 billion this year, maintaining its position as APAC’s strongest market despite global economic uncertainties.
Forrester’s initial projection of 6.5% growth in APAC tech spending for 2025 is now expected to be revised downward by 1-2 percentage points due to the impact of broad-based US tariffs.
These measures are anticipated to increase technology costs, disrupt supply chains and dampen IT investments across the region. The revised forecast comes as the region’s tech spending was expected to grow to $722 billion in 2025 from $678 billion in 2024.
India’s tech sector shows particular resilience with spending originally forecast to grow by 11% in 2025. Forrester said that while this figure may moderate slightly due to tariff-related disruptions, the country is still expected to significantly outperform the regional average.
This strength stems from India’s aggressive digital infrastructure development and rapid adoption of emerging technologies like artificial intelligence.
“India’s technology landscape is entering an unprecedented phase of growth and innovation,” said Ashutosh Sharma, VP and research director at Forrester. “With the country maintaining its position as the fastest-growing large economy and continuing its push for digitalisation, we continue to anticipate robust tech spending growth of over 10% annually. The rapid adoption of emerging technologies like generative AI will not only enhance productivity but also position India as a global leader in AI and tech talent.”
Sharma cautioned, however, that challenges remain: “Navigating workforce upskilling, regulatory frameworks and potential tariff implications will be critical to harnessing AI-driven opportunities and ensuring sustainable economic growth. India’s unique combination of a thriving digital ecosystem, demographic dividend and strategic focus on innovation is set to drive significant contributions to both its economy and the global tech landscape.”
Across APAC, Forrester’s Asia Pacific Tech Market Forecast, 2024 to 2028 shows distinct growth patterns. The software market is projected to grow 10.4% in 2025 with AI and cloud services dominating demand. This growth is particularly strong in Southeast Asian economies where digital transformation programmes are advancing rapidly.
The IT services category is expected to grow by 6% propelled by rising demand for hybrid cloud solutions, cybersecurity consulting and system integration to manage increasing regulatory complexity.
While these forecasts were established before the latest tariff developments, Forrester maintains that the fundamental drivers of growth – AI, cloud and digital infrastructure – remain intact.
Country-specific projections highlight diverse growth trajectories in tech spending across the Asia-Pacific region. Australia is expected to see 6.6% growth, reaching approximately $52.4 billion, driven by rising investments in cybersecurity, generative AI and cloud infrastructure.
China, the region’s largest spender, is projected to grow 7.7% with tech expenditure totalling around $264 billion, supported by government-led efforts to boost domestic consumption and achieve greater technological self-reliance.
Singapore’s tech spending is forecast to increase by 5.6%, reaching about $19 billion, fuelled by continued AI adoption and the rollout of its Digital Connectivity Blueprint.
Southeast Asia in particular is demonstrating strong momentum, with Indonesia growing at 8.5%, Malaysia at 7.2%, the Philippines at 9.4%, Thailand at 7.7% and Vietnam leading with 10% growth. Collectively, these five countries are expected to spend approximately $69 billion, underscoring the region’s accelerating shift toward digital transformation.
“Asia Pacific’s tech spending growth continues to demonstrate the region’s commitment to leveraging technology to build resilience and drive innovation in an uncertain global climate,” said Frederic Giron, VP and senior research director at Forrester.
“But the immediate economic headwinds and heightened uncertainty stemming from the new tariffs are likely to influence the pace, prioritisation and funding of technology initiatives in the coming months.”
Giron advised that “business and tech leaders must engage in comprehensive scenario planning to anticipate various outcomes and develop adaptive strategies that ensure organisational resilience.”
While India’s tech sector appears well-positioned to weather the storm, the broader APAC market faces a period of adjustment as businesses and governments navigate the new tariff landscape.
The coming months will likely see organisations across the region reassessing their technology investment strategies to balance growth ambitions with emerging economic realities.
