Indian businesses are making significant strides in responsible AI adoption, with nearly 60% of companies that are now confident in scaling AI responsibly having mature frameworks in place, according to Nasscom’s State of Responsible AI in India 2025 report released today.
The survey of 574 senior executives reveals a marked improvement from 2023, with 30% of organizations establishing mature responsible AI (RAI) practices and 45% actively implementing formal frameworks. This progress cuts across company sizes, though large enterprises lead at 46% maturity, while startups and SMEs follow at 16% and 20% respectively.
“As AI becomes deeply embedded in critical decisions across finance, healthcare, and public services, responsible AI is no longer optional,” said Sangeeta Gupta, Senior VP and Chief Strategy Officer at Nasscom. She emphasized that India’s AI leadership will be measured not just by adoption scale, but by how responsibly systems are designed and deployed.
Sector-wise analysis shows financial services leading at 35% maturity, followed by technology, media, and telecom at 31%, and healthcare at 18%. A crucial finding reveals that companies with higher AI maturity demonstrate proportionately stronger RAI frameworks, establishing a clear link between technical capability and responsible practices.
However, significant challenges persist. Organizations report hallucinations as the most frequent issue at 56%, followed by privacy violations at 36%, lack of explainability at 35%, and unintended bias at 29%. Implementation barriers include a lack of high-quality data affecting 43% of respondents, regulatory uncertainty at 20%, and skilled personnel shortages at 15%.
Workforce development remains central, with nearly 90% of organizations investing in training and sensitization programs. While companies express confidence in meeting data protection obligations, monitoring-related compliance remains concerning. Accountability structures are evolving, with 48% placing primary responsibility with C-suite or board members, though 26% now assign it to departmental heads.
Looking ahead, businesses face the challenge of adapting to emerging Agentic AI technologies. While half of mature organizations believe their frameworks can address these developments, industry experts warn that substantial updates will be needed to adequately manage the novel risks posed by increasingly autonomous AI systems.