Overview

The State of AI in Indian Enterprises 2026 report, published by ET Edge CIO&Leader – a brand of The Times Group – was unveiled at the 27th CIO&Leader Conference, “The Agentic Enterprise,” held in Jaipur from July 31 to August 2, 2026. The study draws on surveys of more than 300 senior enterprise technology leaders conducted in May and June 2026.

Key Findings

  • AI maturity: 60 % of organisations remain at the pilot or exploration stage of their AI journey despite two or more years of investment.
  • Measurable returns: Only 12 % of respondents can point to a significant, measurable return on AI investment, while 57 % either have no measurable ROI or cannot determine whether returns exist.
  • Budget allocation: 83 % of technology leaders cite productivity improvement as the primary reason for AI investment, yet 58 % allocate less than 10 % of the overall IT budget to AI, and 55 % have either experienced AI cost overruns in the past year or do not track AI spending separately from the broader IT budget.
  • Risk and compliance: 81 % name data privacy and compliance as their leading AI concern, but only 19 % describe their organisation as highly prepared to meet obligations under India’s Digital Personal Data Protection (DPDP) Act. Additionally, 9 % report having no formal AI governance structure, and close to two in five organisations report a confirmed or suspected AI‑related security incident.
  • Agentic AI adoption: 64 % of technology leaders report that their organisation is actively piloting or has deployed agentic AI – systems that execute multi‑step tasks and make decisions autonomously. Among respondents focused on risk and governance, 46 % name agentic AI as the capability most likely to reshape enterprise operations in the next eighteen months, ahead of any other emerging technology.

Board‑Level Priorities

The report outlines four immediate priorities for Indian boards over the next 18 months:

1. Require evidence of business ownership and data readiness before funding any AI pilot, to close the pilot‑to‑production gap.

2. Insist on a rigorously measured ROI benchmark before authorising further AI investment.

3. Treat DPDP compliance for AI systems as a present legal obligation, not a future initiative.

4. Mandate documented governance – including autonomy limits, audit trails, and escalation paths – before scaling any autonomous AI system beyond a pilot.

Commentary from ET Edge Leaders

> “The spending arrived. The returns have not. That is not a story about a market failing for lack of vision — it is a lack of process discipline, in how pilots are selected, who owns the business case, and how success is measured. Those are decisions a board can and should be asking about directly.” – R. Giridhar, Editorial Director – Technology, ET Edge

> “Every AI budget a board approves is also, implicitly, a risk the board has accepted. Data privacy exposure, concentration in a handful of AI vendors, and now systems that act without a human in the loop are no longer operational details. They belong on the same agenda as capital expenditure and cyber risk.” – Jatinder Singh, Chief Editor, Enterprise Tech Publications, ET Edge

About ET Edge CIO&Leader

ET Edge CIO&Leader, a brand of The Times Group, is India’s leading platform for enterprise technology leaders, facilitating insights on emerging technologies, digital transformation, leadership, innovation, and business strategy.

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