Indian companies are beginning to see returns from their investments in artificial intelligence (AI), but their ability to manage the risks is declining, highlighting a growing gap between adoption and preparedness, suggests a new report from IT services provider Kyndryl.
As per the report, about 60% of Indian business leaders said their organisations were seeing positive returns on AI investments, up three percentage points from 57% in 2025. However, average readiness to manage external risks fell eight percentage points from 35% to 27% over the same period.
The report, based on a survey of 3,700 senior business leaders across 21 countries, including 200 in India, highlights challenges around cybersecurity, infrastructure and organisational alignment as companies scale AI adoption.
About 85% of Indian organisations have deployed AI in workflows beyond pilot projects. “However, scaling remains a challenge, with 70% reporting more AI pilots than they can realistically scale and 58% saying innovation often stalls after proof of concept,” the report added.
Half of the Indian organisations surveyed said their organisations had changed their AI strategies over the past year, while 31% reported an AI investment failure. Further, 37% of them said their chief human resources officers and chief technology officers or chief information officers disagreed on AI strategy.
“As AI creates opportunity, organisations are now focusing on how to make early returns sustainable,” said Martin Schroeter, chairman and chief executive of Kyndryl.
Cybersecurity, a major concern
Security concerns were the biggest contributor to the decline in external risk readiness for the third consecutive year.
Only 35% of Indian organisations said they were completely prepared to manage cyberattacks, down 10 percentage points from the previous year. Globally, the figure stood at 26%, an 11-percentage-point decline.
The findings point to a disconnect between the benefits of AI for cybersecurity and the companies’ confidence in their ability to respond to the threats. While three in four leaders said AI helped their organisations identify threats faster, confidence in their ability to manage cyberattacks had weakened.
The report also found that 80% of Indian organisations were using AI agents to automate workflows that previously required coordination across multiple teams or systems, raising questions about the impact of the technology on established business models.
Upgrading IT infrastructure remained the top action Indian organisations were taking to mitigate external risks. While 71% of leaders described their infrastructure as mostly or fully modernised, 59% said significant re-architecture would be required to support AI at scale.
As per the report, about 60% of Indian business leaders said their organisations were seeing positive returns on AI investments, up three percentage points from 57% in 2025. However, average readiness to manage external risks fell eight percentage points from 35% to 27% over the same period.
The report, based on a survey of 3,700 senior business leaders across 21 countries, including 200 in India, highlights challenges around cybersecurity, infrastructure and organisational alignment as companies scale AI adoption.
About 85% of Indian organisations have deployed AI in workflows beyond pilot projects. “However, scaling remains a challenge, with 70% reporting more AI pilots than they can realistically scale and 58% saying innovation often stalls after proof of concept,” the report added.
Half of the Indian organisations surveyed said their organisations had changed their AI strategies over the past year, while 31% reported an AI investment failure. Further, 37% of them said their chief human resources officers and chief technology officers or chief information officers disagreed on AI strategy.
“As AI creates opportunity, organisations are now focusing on how to make early returns sustainable,” said Martin Schroeter, chairman and chief executive of Kyndryl.
Cybersecurity, a major concern
Security concerns were the biggest contributor to the decline in external risk readiness for the third consecutive year.
Only 35% of Indian organisations said they were completely prepared to manage cyberattacks, down 10 percentage points from the previous year. Globally, the figure stood at 26%, an 11-percentage-point decline.
The findings point to a disconnect between the benefits of AI for cybersecurity and the companies’ confidence in their ability to respond to the threats. While three in four leaders said AI helped their organisations identify threats faster, confidence in their ability to manage cyberattacks had weakened.
The report also found that 80% of Indian organisations were using AI agents to automate workflows that previously required coordination across multiple teams or systems, raising questions about the impact of the technology on established business models.
Upgrading IT infrastructure remained the top action Indian organisations were taking to mitigate external risks. While 71% of leaders described their infrastructure as mostly or fully modernised, 59% said significant re-architecture would be required to support AI at scale.