Nearly half of Indian firms now run live GenAI use cases: Report

Nearly half of Indian companies now run multiple Generative AI use cases in production, even as most continue to keep AI spending at modest levels, according to a new EY–CII report.

The report said 47 per cent of Indian enterprises have moved beyond pilots to active GenAI deployment, signalling a clear shift from experimentation to full-scale use.

A further 23 per cent are still in pilot mode. While confidence in AI remains high, more than 95 per cent of firms continue to allocate less than 20 per cent of their IT budgets to AI and machine learning.

The EY–CII report, titled ‘The AIdea of India: Outlook 2026’, is based on a survey of 200 organisations across over 20 sectors, including government bodies, PSUs, startups, global capability centres and Indian arms of multinational corporations. Responses were collected from C-suite executives and senior leaders.

It found that 76 per cent of business leaders believe GenAI will have significant business impact, and 63 per cent feel prepared to leverage it effectively. Rapid deployment remains the top priority in buy-versus-build decisions, with 91 per cent of decision-makers citing it as the most important factor.

Over the next year, AI investments are expected to focus on operations (63 per cent), customer service (54 per cent) and marketing (33 per cent), reflecting efforts to embed AI into functions tied directly to business performance.

Despite rising confidence, AI spend remains conservative. Only 4 per cent of organisations devote more than 20 per cent of their IT budgets to AI, highlighting what the report describes as a gap between conviction and financial commitment. It said enterprises are shifting from traditional cost and productivity metrics to a broader five-dimensional ROI model covering time saved, efficiency, business upside, strategic differentiation and resilience.

The survey also found that Indian companies are partnering more actively with startups and OEMs. Nearly 60 per cent reported such collaborations, moving beyond in-house models to accelerate innovation. Hybrid deployment is now dominant, with 78 per cent using a mix of internal and external resources.

On workforce impact, the report highlighted the emergence of a “new workforce pyramid”, with 64 per cent of enterprises selectively transforming roles linked to standardised tasks. Talent shortages persist, with 59 per cent citing gaps in AI skills. As operating models evolve, companies are building AI-first architectures where humans work closely with machines to strengthen decision-making, speed and precision.

(With inputs from agencies)