India’s AI Spend Seen Rising to 21.3% of IT Budgets by 2027: ServiceNow

Artificial intelligence accounts for 16.6% of the average IT budget of Indian companies, according to the ServiceNow Enterprise AI Maturity Index 2026. 

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Enterprise AI investment in India grew 119% over the past year. The corresponding growth globally was 110%. 

The increase in spending has come while many businesses are still working on their AI readiness. Only 22% of Indian enterprises have processes in place to test, audit and assess AI-related risks. 

AI agents are already being used by 54% of organisations covered in the study. Autonomous workflows, however, are being used by 11%. 

Transparency and misinformation were concerns for 60% of organisations. Regulatory and compliance issues were cited by 55%, while 50% pointed to data privacy and security. 

Legacy systems and data remain issues 

Only 18% of organisations have moved from fragmented legacy systems to an integrated platform. AI-enabled workflows scored 41 out of 100 in the study. 

Data is another area where companies see room for improvement. About 74% of organisations said data accuracy, access and management need to get better for AI use. Integration with legacy systems was identified as a difficulty by 56%. 

India's AI governance score was 55 out of 100. The score for APAC's AI Pacesetters was 78. 

The difference is also visible in AI returns. APAC Pacesetters are recording a 149% return on investment from AI, with the figure expected to reach 181% over the next two years. The study also found these organisations to be six times more productive than their peers. 

India’s AI policy framework 

The report also points to measures taken in India around AI governance and adoption. These include the Digital Personal Data Protection Act and its rules, the AI Governance Guidelines launched at the February 2026 AI Impact Summit, the IndiaAI Mission and the IndiaAI Safety Institute. 

The study was conducted by ServiceNow with ThoughtLab. It covered 4,500 senior leaders globally, including 350 respondents from India.