A recent research report by the International Data Corporation (IDC) and data integration platform Qlik revealed that investment in artificial intelligence (AI) by Indian enterprises is projected to grow at a compound annual growth rate (CAGR) of 35%, reaching US$ 9.2 billion by 2028.
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India is on the cusp of a significant technological transformation, with Artificial Intelligence (AI) taking center stage in the digital evolution of its enterprise landscape. According to a recent report by the International Data Corporation (IDC) and data integration platform Qlik, investment in AI by Indian enterprises is poised to grow at an impressive compound annual growth rate (CAGR) of 35%, reaching a staggering US$ 9.2 billion by 2028. This growth is being driven by the rapid adoption of AI solutions across sectors and the increasing importance of generative AI (GenAI) in business processes.
The report highlights that 36% of Indian enterprises have already integrated generative AI into their operations, with another 46% planning to invest in the technology within the next 12 to 24 months. This points to a rapidly maturing AI landscape where companies are not only exploring but actively embedding AI tools to enhance productivity, improve decision-making, and create innovative customer experiences.
Moreover, India is showing a strong inclination towards experimentation with AI technologies. Around 18% of enterprises currently have AI projects in the proof-of-concept stage—significantly higher than the Asia-Pacific (APAC) average of 8%. This suggests a progressive mindset among Indian businesses, willing to explore the potential of AI before full-scale deployment.
However, despite the enthusiasm and increasing investments, several hurdles continue to slow down the effective implementation of AI across industries. A major challenge identified in the report is data quality. Around 54% of Indian enterprises cited poor data quality as a barrier to AI adoption—higher than the figures reported for Australia and ASEAN countries (both at 40%), and even the APAC average of 50.4%. Data quality issues can impact the accuracy of machine learning (ML) models, leading to unreliable outcomes and limiting the utility of AI initiatives.
Another concern raised in the report is data governance and privacy. Nearly 62% of Indian organisations believe there is an urgent need to enhance governance frameworks and privacy policies. As AI becomes more deeply embedded in critical business functions, the risks associated with biased algorithms, data misuse, and non-compliance with regulations also increase. In fact, 28% of Indian enterprises reported struggling with AI-related data bias—significantly above the ASEAN average of 21.8%.
“GenAI is transforming industries in India—from compliance in retail to fraud prevention in finance and predictive maintenance in manufacturing,” said Deepika Giri, Associate Vice President of Big Data Analytics, Blockchain, and Web3 Research at IDC Asia/Pacific. “But to unlock its full potential, organisations must prioritise trusted data, robust governance, and infrastructure readiness to scale AI effectively and responsibly.”
The Cloud-AI Connection
A pivotal finding of the report is the symbiotic relationship between cloud adoption and AI deployment. Over half (51%) of Indian enterprises are deploying AI solutions in the cloud, and a vast majority—80%—see cloud migration as essential to scaling AI capabilities. The cloud offers scalability, cost-efficiency, and agility, all of which are critical for running complex AI workloads and managing massive datasets.
India is leading ASEAN countries in public cloud adoption, with 40% of enterprises leveraging one or more public clouds, compared to 31% in ASEAN. Additionally, 30% of organisations are opting for a hybrid model that combines the strengths of both public and private cloud environments.
“Indian organisations see cloud adoption as a critical step toward AI success,” said Varun Babbar, Vice President, India, Qlik. “To scale AI-driven innovation, businesses need a strong, scalable data infrastructure that supports high-performance AI applications.”
The Road Ahead
As India accelerates its digital transformation, AI is becoming a foundational element for future growth and competitiveness. From enhancing customer service through intelligent chatbots to transforming supply chains with predictive analytics, the use cases for AI are rapidly expanding.
However, for India to fully realize the benefits of this AI revolution, businesses must address the foundational issues of data quality, governance, and infrastructure readiness. Investing in clean, structured, and well-governed data will be as important as investing in AI tools themselves. Furthermore, upskilling talent, setting ethical AI frameworks, and ensuring interoperability between systems will be vital steps in the journey.
The growth projections indicate a promising future, but it will take a strategic, responsible, and well-orchestrated approach to unlock the true potential of AI in Indian enterprises.
