India’s AI Investments Rise, But Innovation, ROI Key Hurdles: Kyndryl Report

Indian organisations are increasing their AI investments while facing pressure to modernise infrastructure, scale innovation, reskill workforces, and navigate a fragmented regulatory landscape, a new report by Kyndryl shows.

The country stands out in the speed and scale of its AI adoption, with 91% of organisations expecting AI to fully transform roles within a year. AI investment has risen 37% year-on-year. Yet, 63% of organisations feel pressure to prove AI’s ROI, signalling a shift from experimentation to accountability as AI embeds into core business strategies, the report showed.

ROI Under Pressure: Around 63% of Indian organisations feel pressured to prove AI’s return on investment, while 75% admit that their innovation efforts stall after proof-of-concept. 

Execution And Infrastructure Challenges: About 69% cited foundational technology issues as major roadblocks, highlighting a critical gap: infrastructure and processes are not evolving as quickly as the strategy guiding them.

Geopolitical Pressures Forcing Data Pivot: Organisations are reevaluating where and how their data is stored, processed, accessed, and secured amid a fragmented regulatory landscape. In India, 81% express concern over geopolitical risks in cloud data storage, and 55% are re-evaluating data governance frameworks.

Skills Gaps Remain: AI adoption is accelerating faster than organisations can adapt, with 51% of Indian leaders concerned about technology skills, 42% about cognitive skills, and 43% about reskilling. 

Cyber Resilience Under Spotlight: Almost 88% of Indian organisations have experienced a cyber-related outage. Importantly, only 35% consider themselves “completely ready” for future risks. 

Many organisations are also revisiting their cloud infrastructure, prompted by new global regulations and growing concerns about data sovereignty. While 62% leaders in India admit struggling to keep up with technological change, nearly all (99%) would change something about their cloud implementation.

“India’s enterprises expect AI to have a transformational impact on their businesses yet struggles with adoption. Organisations must address this execution gap by investing in robust technology foundations, fostering cross-functional collaboration, and embedding accountability into every stage of the innovation lifecycle,” said Lingraju Sawkar, president, Kyndryl India.