India Inc. is increasingly embracing Generative AI (GenAI) to maintain a competitive advantage in a rapidly evolving technological landscape. Indian organizations are prioritizing innovation through AI, driven by both internal and external pressures. A Deloitte report indicates that over 95% of respondents feel compelled to adopt GenAI to stay ahead in their industries.
Investment and Adoption Trends
Indian GenAI startups have become investment magnets, securing $524 million in the first seven months of 2025, a five-year high, which is four times the amount raised in 2021. This surge in investment is fueled by the increasing adoption of AI for automation by enterprises. An Elastic report reveals that 81% of Indian organizations have already adopted GenAI, positioning India as a global leader in GenAI adoption.
Several major Indian conglomerates are establishing dedicated AI units to integrate AI across their businesses. Reliance Industries, for example, has launched Reliance Intelligence to partner with Google and Meta and embed AI across various sectors. Mahindra Group created Mahindra.AI to drive its AI strategy, while Godrej Enterprises has committed to spending ₹1,200 crore on digital and GenAI solutions. The Adani Group has also partnered with Sirius International Holding to focus on AI, IoT, and blockchain.
Applications and Impact
GenAI is being leveraged for critical functions such as quality control, risk assessment, fraud detection, process automation, and personalized service recommendations. Two-thirds of Indian C-suite executives expect GenAI to improve competitiveness, accelerate innovation, enhance compliance, bolster security, and drive revenue growth within the next two years. Over 67% of firms report that GenAI has positively affected all phases of the software development lifecycle, and almost 70% of respondents said their AI integration efforts met or surpassed ROI estimates. Furthermore, 70% of firms indicated a strong desire to use GenAI for automation, highlighting the increasing adoption of AI-powered autonomous systems across industries.
Challenges and Concerns
Despite the optimism and increasing adoption, several challenges hinder the effective implementation of GenAI in India. These include concerns about data privacy and security, a lack of clarity and guidance on GenAI use, and the need for employee training. Skill gaps also pose a significant challenge, with 55% of respondents highlighting the need for employee training to effectively integrate GenAI into workflows. Additionally, 75% of Indian companies lack a change management strategy to help employees adapt to AI-centric work environments.
A Michael Page India report indicates that enterprises are struggling to provide the structure, access, and clarity needed to support the use of GenAI in the workplace. As a result, 42% of professionals in India view GenAI as a threat to job security.
Addressing the Challenges
To overcome these challenges, Indian companies are focusing on thoughtful integration, high-quality data, and a deep understanding of business workflows. AI service providers are implementing measures to address issues like "AI slop" during AI training and inference by using data curation to filter out low-quality or irrelevant content and ensure consistency.
Indian organizations need to build trust in AI systems by addressing concerns about errors, bias, and data quality through strong governance. Companies are also urged to prepare a suitable ecosystem for experiments to scale and measure the impact of GenAI use.
Future Outlook
The integration of GenAI has the potential to significantly boost India's IT services sector and contribute substantially to the country's GDP. Projections indicate that AI could contribute up to $500 billion to India's GDP by 2025. As Indian businesses move beyond experimentation to large-scale deployment, the focus will be on scaling AI initiatives and aligning them with broader business plans to maximize returns on investment.
