Nearly half of Indian enterprises now have multiple artificial intelligence (AI) use cases running in production, but investment remains cautious with over 95% of organisations allocating less than 20% of their IT budgets to AI initiatives, according to a survey by EY and the Confederation of Indian Industry (CII).
The survey of 200 organisations across more than 20 industries including government bodies, public sector undertakings, startups, enterprises, global capability centres, and Indian arms of multinational corporations revealed a stark gap between conviction and capital commitment. While 76% of business leaders expressed confidence that generative AI will have significant business impact, only around 4% have allocated more than 20% of their overall IT budget for AI and machine learning investments.
This imbalance between belief and funding is emerging as a defining factor in how quickly enterprises can extract measurable returns from AI, the report noted.
Despite conservative budgets, deployment momentum is building. The data showed 47% of Indian enterprises now have multiple generative AI use cases live in production, while 23% remain in the pilot stage.
“Corporate India has moved beyond experimentation. Nearly half the enterprises already have multiple use cases in production,” said Mahesh Makhija, Partner and Technology Consulting Leader at EY India. “For enterprises, the focus must now move from building pilots to designing processes where humans and AI agents collaborate seamlessly.”
Deployment speed has emerged as the critical factor reshaping AI strategy, with 91% of business leaders identifying rapid deployment as the single biggest influence on their “buy versus build” decisions. Over the next 12 months, organisations plan to focus GenAI investments on operations (63%), customer service (54%), and marketing (33%), the report added.
The execution strategy is increasingly collaborative, with nearly 60% of organisations now co-innovating with startups and 78% adopting hybrid models that combine in-house development with external partnerships.
The workforce impact is already visible, with 64% of enterprises reporting selective transformation in standardised tasks. However, 59% highlighted a persistent shortage of skilled AI talent even as mid-office and innovation-led roles expand rapidly, the report added.
Enterprises are also evolving their measurement frameworks, moving beyond cost reduction and productivity metrics toward a five-dimensional ROI model encompassing time saved, efficiency gains, business upside, strategic differentiation, and resilience, it added.
“While challenges around data readiness, governance and measurement persist, India’s AI journey is moving from pilots to performance,” said Chandrajit Banerjee, director general of CII.
