India's enterprise AI investment has demonstrated remarkable growth, surging 119% in a single year above the global average of 110%, according to the ServiceNow Enterprise AI Maturity Index 2026. The report reveals that AI now accounts for 16.6% of India's average IT budget and is projected to rise to 21.3% by 2027. This substantial investment momentum is being built on world-class digital public infrastructure, deep engineering talent, and one of the fastest rates of enterprise AI adoption globally. However, as noted by Kulmeet Bawa, Managing Director & Group Vice President, ServiceNow India and SAARC, the rapid spending is not translating into widespread AI readiness across Indian enterprises.
Despite strong investment growth, significant implementation gaps remain in AI governance and deployment. Only 22% of Indian enterprises have testing, auditing and risk-assessment processes in place, as reported by the ServiceNow Enterprise AI Maturity Index 2026. The deployment gap is evident as 54% of Indian organisations are deploying AI agents, but only 11% have moved to autonomous workflows. The report identifies transparency and the risk of misinformation as the biggest concerns, cited by 60% of organisations, followed by regulatory and compliance complexity at 55%, and data privacy and security at 50%. This cautious approach to AI independence is particularly evident as companies hesitate to let AI act autonomously, particularly when agents gain access to company data, systems and decision-making processes.
Organisational priorities for AI implementation reveal critical areas requiring attention. According to the ServiceNow Enterprise AI Maturity Index 2026, nearly 74% of Indian enterprises flagged data accuracy, access and management as the area most in need of strengthening for AI. Additionally, 56% pointed to legacy system integration as a key challenge. The technology infrastructure underneath AI remains another weak spot, as only 18% of Indian organisations have replaced fragmented legacy systems with an integrated platform. This has left India with an overall AI governance score of 55 out of 100, well below the 78 scored by APAC's AI Pacesetters. The study also found that AI-enabled workflows scored just 41 out of 100, highlighting the need for integrated platform solutions.
India has established a comprehensive regulatory framework for AI development and governance. The report notes that India has moved early to put an enabling framework in place, including the Digital Personal Data Protection Act and the DPDP Rules, which came into force in 2025, to the AI Governance Guidelines launched at the February 2026 AI Impact Summit. Additionally, the IndiaAI Mission, and the establishment of the IndiaAI Safety Institute indicates a purposeful national approach to AI development. The ServiceNow Enterprise AI Maturity Index 2026, conducted with ThoughtLab and surveying 4,500 senior leaders globally including 350 from India, reveals that APAC Pacesetters are generating a 149% return on investment from AI, which is expected to rise to 181% over the next two years. As noted by Kulmeet Bawa, the next leap will be defined by how Indian enterprises pair AI ambition with governance, connected data and workflows that let AI take on more consequential work.
