Indian IT keeps tech budgets modest

IBM India and the government-backed IndiaAI mission said this week that India’s AI push will depend less on sudden spending jumps than on skills, governance and data preparation. EY and the Confederation of Indian Industry, in a separate November 2025 survey still cited by executives, found Indian companies were already putting AI into production while keeping budgets restrained. Together, the reports point to a pattern across Indian enterprises: more pilots are moving into live use, but spending remains targeted rather than broad-based. Sandip Patel, IBM India & South Asia’s managing director, said many companies are still stuck between experimentation and scale because their data and controls are not ready. ### Why are companies talking about modest budgets if AI adoption is rising? EY and CII said on November 16, 2025 that 47% of Indian enterprises had multiple generative AI use cases live in production, while another 23% were still in the pilot stage. The same report said more than 95% of organizations allocated less than 20% of their IT budgets to AI and machine learning, with only 4% above that threshold. (economictimes.indiatimes.com) Mahesh Makhija, partner and technology consulting leader at EY India, said the focus for enterprises should move from building pilots to designing processes where humans and AI agents work together. He said companies that prioritize data readiness, model assurance and responsible AI will shape the next phase of adoption. (ey.com) ### What is the 30%-to-60% workforce target people are citing? Sandip Patel said on May 13 that about 30% of India’s roughly 600 million workers — nearly 200 million people — are AI-literate, citing the new IBM-IndiaAI report. He said that if the figure rises to almost 60% by 2030, India could become a global “skill capital” for AI. (ey.com) IBM’s report said AI could generate more than $500 billion in economic value for India by 2030, but it tied that outcome to architecture, governance, skills and industry alignment rather than model development alone. The report also said many organizations still face fragmented or inconsistent data, which makes it harder to deploy AI reliably at scale. (economictimes.indiatimes.com) ### Why are data readiness and governance getting so much attention? Patel said one reason many companies have not moved from pilot to scale is data readiness. He also said trust and AI governance are slowing adoption, raising questions about whether companies can rely on AI outputs and whether they have controls for responsible use. (ibm.com) IBM’s report made the same point in broader terms, saying India’s AI gains depend on the right architecture, sovereign and domestic infrastructure, trusted datasets and governance frameworks. EY’s survey likewise said challenges around data readiness, governance and measurement persist even as production use grows. ### Are Indian companies actually cutting technology spending? (economictimes.indiatimes.com) Bain & Company said in its India Enterprise Technology Report 2026 that Indian enterprises are increasing overall IT spending by about 6% to 8% in 2026, with much of the money going to data modernization, AI infusion, application modernization, cloud and cybersecurity. Bain said Indian companies are spending 150 to 200 basis points more on IT as a share of revenue than global counterparts. (ibm.com) That means the current picture is not a freeze in technology budgets. The more precise pattern, based on Bain, EY-CII and IBM, is that enterprises are still spending on transformation, but AI-specific allocations remain controlled and are being directed toward data foundations, modernization and governance rather than broad hiring or unchecked deployment. This is an inference from the three reports’ findings. (bain.com) ### What should readers watch next? IBM and IndiaAI released “From promise to power: How AI is defining India’s economic future” this week, and Patel linked its workforce target to 2030. EY-CII’s next comparable enterprise survey will be watched for any change from the November 2025 finding that more than 95% of firms kept AI spending below one-fifth of IT budgets. (economictimes.indiatimes.com) (bain.com)