AI uptake push: Indian firms scale GenAI deployments; cautious budgets hold back big bets

Indian companies are rapidly moving from AI experimentation to real-world deployment, but most remain cautious about writing big cheques for large-scale transformation, a new EY–CII study has found.According to the report, 47% of enterprises now run multiple Generative AI applications in their core workflows, a sharp shift from the pilot-heavy approach seen even a year ago. Yet over 95% allocate less than one-fifth of their IT budgets to AI and ML, underscoring what the study describes as a gap between ambition and financial commitment, PTI reported .“Enterprises are embedding AI deeper into operations to deliver tangible, measurable outcomes,” the report notes, adding that 76% of business leaders expect GenAI to significantly reshape their businesses, and 63% believe they are positioned to harness it effectively.The findings are drawn from The AIdea of India: Outlook 2026, based on responses from 200 organisations across 20 sectors - from PSUs and government entities to startups, global capability centres and multinationals operating in India.Rapid rollout has emerged as the decisive factor in AI strategy, with nine in ten executives prioritising speed when choosing between in-house development and external solutions.

Companies expect to channel upcoming investments into operations, customer service and marketing --functions directly tied to business performance.But spending discipline remains pronounced. EY notes a shift in how companies judge AI outcomes: “ROI is no longer about cost savings alone — it spans efficiency, time optimisation, business upside, competitive edge and long-term resilience.”Indian firms are increasingly turning to external innovation.

Nearly 60% are co-developing solutions with startups or OEMs, signalling a move away from stand-alone internal builds. Hybrid models remain dominant, with 78% blending internal teams with external specialists to accelerate execution.The rise of AI is also remaking workforce structures. Sixty-four per cent of companies report role shifts in standardised tasks, while a persistent talent crunch continues to worry leaders - 59% cite shortages of AI-ready professionals.

New mid-office and innovation roles are emerging as firms redesign processes for an AI-first future.Despite restrained budgets, the study suggests the momentum is firmly on the side of adoption. Companies that began early are now scaling GenAI across departments, setting the tone for what the report calls a “performance-led phase” of India’s enterprise AI journey.