A significant transformation is underway in India's corporate landscape as generative artificial intelligence moves from experimental phases to real-world applications. According to a comprehensive joint survey by Ernst & Young and the Confederation of Indian Industry, nearly half of Indian enterprises have successfully transitioned their GenAI initiatives into operational use cases.
GenAI Adoption Gains Momentum Across Indian Industry
The survey titled 'Is India ready for Agentic AI? The AIdea of India: Outlook 2026' reveals that over 47% of Indian companies have advanced their generative AI pilots into live, functioning implementations. An additional 23% of enterprises are currently in the experimentation phase with these advanced AI products.
This extensive research, launched on Sunday, November 16, gathered insights from C-suite executives and senior leaders across 200 organizations. The participating entities represented a diverse cross-section of India's economic ecosystem, including government bodies, public sector undertakings, startups, Indian enterprises, global capability centers, and the Indian subsidiaries of multinational corporations.
The Investment Paradox: High Conviction, Low Spending
Despite the growing enthusiasm for artificial intelligence, the survey uncovered a significant disconnect between corporate optimism and financial commitment. While 76% of business leaders believe that GenAI will substantially impact their operations and 63% feel prepared to leverage it effectively, the actual financial allocation tells a different story.
The report indicates that more than 95% of organizations dedicate less than 20% of their IT budgets to AI initiatives. Only a mere 4% of surveyed Indian enterprises have allocated amounts exceeding 20% of their IT budgets toward artificial intelligence development and implementation.
The survey authors noted that "there is a clear imbalance between conviction and commitment, which is becoming a defining factor in how quickly enterprises extract measurable returns from AI." This assessment comes at a time when enterprise leaders globally express increasing concerns about the lack of returns on substantial AI investments.
Global Context and Workforce Implications
The EY-CII findings emerge against a backdrop of mixed global AI adoption trends. According to technology research firm IDC, businesses worldwide are expected to increase their generative AI investments by 94% this year to $61.9 billion. However, a separate study by S&P Global involving over 1,000 technology and business managers revealed that the percentage of companies abandoning most of their AI pilot projects rose to 42% by the end of 2024, up from just 17% the previous year.
A recent Massachusetts Institute of Technology study further highlighted the challenges, reporting that 95% of 300 US-based firms that had collectively invested between $35 billion to $40 billion in generative AI saw minimal to no returns, primarily due to flawed enterprise integration strategies.
The workforce transformation is already visible in Indian organizations, with 64% of enterprises reporting selective workforce transformation in standardized tasks due to AI implementation. However, 59% of respondents simultaneously highlighted a critical shortage of workers skilled in artificial intelligence technologies.
Looking ahead, Indian organizations plan to focus their GenAI investments primarily on operations (63%), customer service (54%), and marketing (33%) use cases over the next twelve months. The report describes the emergence of "AI-first architectures of work" - a new operational model where humans and machines collaborate to enhance decision-making, speed, and precision.
In terms of implementation strategy, the survey found that 60% of Indian businesses are partnering with startups to leverage AI models and tools rather than relying exclusively on in-house development. Another 78% have adopted hybrid models that combine external partnerships with internal capabilities.
The rapid deployment of AI tools has become the single most influential factor for 91% of business leaders in their "buy versus build" decisions, indicating that speed to market is prioritized over complete technological maturity.
