India is rapidly emerging as a global leader in artificial intelligence (AI), with businesses making significant progress in AI implementation, leading open-source adoption, and scaling AI investments at an unprecedented rate.
The IBM ROI of AI Report 2024, highlights India’s aggressive AI expansion, with 87% of IT decision-makers (ITDMs) reporting significant progress—the highest among countries like Brazil, Mexico, and Indonesia. This suggests that Indian companies are actively integrating it into core operations.
A key factor in this rapid adoption is India’s strong reliance on open-source AI tools, with 48% of AI solutions currently based on open-source. This trend is expected to grow further in 2025, with 70% of ITDMs planning to expand their use of open-source AI tools.
AI Investment planning
Indian enterprises are making aggressive AI investments, with 93% of businesses planning to increase AI spending in 2025—the highest globally, ahead of Brazil (78%) and Mexico (69%). The top three areas of AI investment for Indian companies are:
• IT operations (63%) – Optimizing infrastructure and automating workflows.
• Data quality management (46%) – Enhancing accuracy and reliability of AI models.
• Software development (41%) – Accelerating coding and debugging processes.
AI Pilots
In 2024, 45% of Indian companies launched more than 21 AI pilots, reflecting the country’s aggressive push toward AI-driven innovation. This number is expected to rise in 2025 as companies test and refine AI solutions across different business functions.
Challenges hindering implementation
Despite the momentum, Indian companies face major hurdles in AI deployment. Technology integration (51%) and lack of AI expertise (51%) are the two biggest obstacles. The first is Technology Integration, where many enterprises struggle with incorporating AI into existing IT infrastructures. The second is the lack of AI expertise, where the skills gap is slowing down AI adoption, highlighting the need for specialized talent.
To overcome these challenges, 53% of Indian companies are prioritizing cloud-managed services, while 49% are increasing their reliance on open-source AI.
Redefining AI ROI
Unlike some markets where AI is measured primarily by cost savings, 32% of Indian ITDMs cite “faster innovation” as the most important return on AI investments. This aligns with India’s broader strategy of leveraging AI to drive technological advancement rather than immediate financial returns.
The data from the IBM report highlights India’s strong AI trajectory. With a surge in investments, widespread AI experimentation, and a focus on open-source and cloud-based solutions, India is positioning itself as a major AI innovation hub.