India's AI Investment Jumps 119% While AI Governance Lags at 22%: ServiceNow Report

India Leads Global AI Investment Growth But Governance Lags Behind

India's enterprise AI investment has surged by 119% over the past year, surpassing the global average of 110%, according to the ServiceNow Enterprise AI Maturity Index 20261

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. AI spending in India now accounts for 16.6% of the average IT budget and is projected to reach 21.3% by 20271

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. The ServiceNow report, which surveyed 4,500 senior leaders globally including 350 from India, reveals a critical gap between capital deployment and necessary AI governance frameworks1

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Despite this impressive AI investment growth, only 22% of Indian organizations have established the testing, auditing, and AI risk assessment processes required to manage the technology safely2

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. This represents a widening gap between rapid capital deployment and the foundational governance required to scale AI confidently.

Deployment Outpaces Autonomous Workflows

While 54% of Indian organizations are deploying AI agents, only 11% have transitioned to autonomous workflows1

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. This hesitation reflects growing caution among Indian businesses around allowing AI to act independently, particularly as agents gain access to company data, systems, and decision-making processes2

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. The gap between deployment and autonomy highlights the trust and readiness considerations Indian business leaders are prioritizing.

"India has proven it can commit to AI at a scale few markets can match. The next leap will be defined by how Indian enterprises pair that ambition with governance, connected data and workflows that let AI take on more consequential work," said Kulmeet Bawa, Managing Director and Group Vice President at ServiceNow India and SAARC1

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Transparency Concerns and Regulatory Complexity Top Barriers

Transparency concerns and the risk of misinformation emerged as the biggest obstacles, cited by 60% of organizations2

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. Regulatory complexity follows at 55%, while data privacy concerns were flagged by 50% of respondents2

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. These concerns reflect the reality that every AI agent deployed represents an identity with access to sensitive data and systems, requiring robust governance to operate safely3

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Infrastructure Fragmentation Hinders AI Maturity

Infrastructure fragmentation remains a significant bottleneck. Only 18% of Indian organizations have replaced fragmented legacy systems with integrated platforms1

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. AI-enabled workflows scored just 41 out of 100 in the study2

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. Without connected data and unified platforms, enterprises lack the single layer through which AI can be monitored, audited, or governed effectively3

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About 74% of organizations identified data accuracy, access, and management as areas needing strengthening for AI, while 56% pointed to legacy system integration challenges2

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India Trails APAC Pacesetters in AI Governance

India's overall AI governance score stands at 55 out of 100, significantly trailing APAC Pacesetters who score 78 out of 1001

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. This gap matters because more mature AI adopters are already seeing substantial returns. APAC Pacesetters are generating a 149% return on investment from AI, expected to rise to 181% over the next two years, and are six times more productive than their peers2

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National AI Framework Supports Enterprise Readiness

India is building a comprehensive policy framework around AI, including the Digital Personal Data Protection Act and rules, the AI Governance Guidelines launched at the February 2026 AI Impact Summit, the IndiaAI Mission, and the IndiaAI Safety Institute2

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. This national approach supports innovation while building trust for enterprises, talent, and consumers. Aligning internal AI governance with this national direction is becoming a mark of readiness and competitive advantage3

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The Shift Toward Agentic AI Demands Human Oversight

Ashvin Vellody, Partner and Chief Strategy & Innovation Officer at Deloitte India, noted that AI maturity is moving beyond individual use cases toward reimagining workflows, decision-making, and operating models1

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. "Agentic AI will accelerate this shift significantly, as AI begins to take on more complex work and operate with greater autonomy," Vellody said2

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. Companies will need to determine where AI can act independently, where human oversight remains necessary, and how the two can work together effectively2

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. Organizations that build governance foundations first will unlock AI's next tier of value and sustained competitive advantage1

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