AI spending in India is set to grow at a remarkable pace, with IDC predicting it will expand at 2.2 times the rate of overall digital technology spending over the next three years.
This rapid growth is expected to contribute over $115 billion to India’s economy by the end of 2027. Business executives are increasingly focusing on AI-driven strategies, with a forecast that by 2027, they will demand a minimum 70 percent success rate in their GenAI initiatives to enhance operational efficiency and drive new revenue streams.
The rising investments in AI signify a fundamental shift in business strategies, where AI transformation is becoming inseparable from digital business initiatives. While digital transformation remains the foundation of India’s digital journey, AI is emerging as the key driver of high-growth priorities. Companies are now channeling resources into AI adoption at a rate much faster than overall digital technology investment.
As AI becomes a crucial component of business operations, IT leaders are expected to take on greater responsibilities. By 2027, 40 percent of IT leaders in India will transition into business leadership roles, ensuring alignment between people, operations, and digital technologies. Organizations adopting an integrated digital business architecture will enhance the value of their data threefold and reduce the time to outcomes by 20 percent.
However, the rapid expansion of AI adoption also presents challenges, particularly in the area of digital skills. By 2027, 55 percent of India-based organizations are anticipated to face digital skills shortages, leading to project delays and slowing AI technology implementations. Additionally, many enterprises are yet to recognize data as a strategic asset.
By 2025, 80 percent of organizations will fail to establish the necessary data discipline, delaying their AI-driven business models, Neha Gupta, senior research manager, Digital Business and AI Strategies, IDC India, said.
AI’s role in process modernization is also evolving, with enterprises shifting towards AI platform strategies that integrate processes across broader business functions. By 2028, 75 percent of organizations adopting such an approach will see enhanced value from their AI investments. This shift highlights AI’s growing influence in driving efficiency, automation, and innovation across industries.
The future of AI spending in India is poised for exponential growth, redefining the technological investment landscape. AI is no longer an optional addition but a necessity for businesses seeking to remain competitive in an increasingly digital world. As AI continues to shape India’s digital future, enterprises that successfully integrate AI across their operations will be better positioned to capitalize on the opportunities ahead.
