India's Data Breach Costs Soar to Record High Amid AI Security Concerns: IBM Report

Record-Breaking Data Breach Costs in India

A recent report by IBM has revealed that India now faces the highest average cost of data breaches globally, with expenses soaring to Rs 22 crore (approximately $2.67 million) in 2025. This marks a significant 13% increase from the previous year's figure of Rs 19.5 crore 1.

Source: DIGITAL TERMINAL

Sector-Specific Impact

The research sector in India bore the brunt of these data breaches, with average costs reaching Rs 28.9 crore. Close behind were the transportation industry at Rs 28.8 crore and the industrial sector at Rs 26.4 crore 1. This sectoral breakdown highlights the varying degrees of vulnerability and financial impact across different industries.

Primary Attack Vectors

Phishing remains the top attack vector, accounting for 18% of incidents. Third-party vendor and supply chain compromises follow closely at 17%, while vulnerability exploitations make up 13% of the breaches 1. These statistics underscore the diverse nature of cyber threats facing organizations.

AI Adoption and Security Concerns

Source: Economic Times

Despite the widespread adoption of Artificial Intelligence (AI) in business operations, the report highlights a significant gap in AI security governance. Nearly 60% of breached organizations either lack an AI governance policy or are still in the process of developing one 1. This trend suggests that organizations are prioritizing rapid AI implementation over security considerations.

Expert Insights

Viswanath Ramaswamy, Vice President of Technology at IBM India and South Asia, emphasized the strategic vulnerability created by this oversight. He stated, "The absence of access controls and AI governance tools is not just a technical oversight; it's a strategic vulnerability" 2. Ramaswamy further stressed the need for Chief Information Security Officers (CISOs) to act decisively, embedding trust, transparency, and governance into AI systems by design.

Breach Lifecycle Improvements

On a positive note, the average breach lifecycle in India, which includes the time to identify, contain, and restore services after a breach, has decreased from 15 days to 263 days in 2025 1. This reduction suggests improvements in incident response capabilities among Indian organizations.

Global Context

The IBM report, which has been conducted for the last two decades and has investigated nearly 6,500 data breaches, provides valuable insights into global cybersecurity trends. The findings indicate that ungoverned AI systems are more likely to be breached and incur higher costs when compromised 2.