Is India ready for Agentic AI?
The AIdea of India: Outlook 2026
The January, 2026 edition of the Hub highlighting a survey report “Is India ready for Agentic AI? The AIdea of India: Outlook 2026”, jointly developed by EY India and the Confederation of Indian Industry, which examines how Indian enterprises are progressing from experimentation with Generative AI (GenAI) toward scaled adoption of Agentic AI. Based on a detailed survey of over 200 Indian enterprises, the report presents a distinctly optimistic narrative on India’s AI readiness, contrasting global skepticism around GenAI pilots with India Inc.’s growing confidence and urgency.
From experimentation to execution
The most significant finding of the survey is the clear transition from pilots to production. While earlier surveys showed GenAI largely confined to proof-of-concept stages, the current data indicates that 47 percent of organizations now have multiple GenAI use cases live, and 10 percent are scaling use cases across the enterprise. Nearly half of respondents report that more than one-fifth of their GenAI pilots have already moved into production. This marks a decisive shift toward operationalization, signaling that AI adoption in India is no longer exploratory but increasingly embedded in business processes.
Indian business leaders demonstrate strong belief in AI’s strategic relevance. Seventy-six percent of respondents believe GenAI will have a significant business impact, and almost two-thirds consider their organizations ready to leverage it. Importantly, this confidence persists despite acknowledged technological limitations such as hallucinations, integration complexity, and challenges in measuring return on investment (ROI). Rather than waiting for perfect models, Indian enterprises are innovating around constraints and prioritizing speed.
Speed, agility, and pragmatic choices
A defining theme of the report is impatience for results. Speed of deployment emerges as the single most important factor influencing buy-versus-build decisions, cited by 91 percent of respondents. This emphasis on rapid time-to-value explains the strong preference for hybrid cloud deployment (71 percent), even though data governance and security remain top concerns. Enterprises appear willing to make pragmatic trade-offs—accepting partial dependence on cloud hyperscalers in exchange for scalability and faster execution.
At the same time, AI investments remain relatively conservative. Over 95 percent of organizations allocate less than 20 percent of their IT budgets to AI initiatives, indicating that while adoption is accelerating, large-scale financial commitment is still evolving. Conversion of pilots to production also remains uneven, with more than half of enterprises reporting pilot-to-production success rates below 10 percent, highlighting persistent bottlenecks in data readiness, system integration, and governance.
Rise of Agentic AI and the future of work
The report places strong emphasis on Agentic AI, describing it as the next phase of enterprise automation. Unlike traditional AI or GenAI copilots, AI agents are goal-oriented systems capable of executing multi-step tasks with limited human supervision. Indian enterprises are already experimenting with such agents in operations, supply chain, customer service, and finance. About 24 percent of surveyed organizations report active deployment of Agentic AI, signaling early but meaningful traction.
The implications for the workforce are nuanced. Rather than large-scale layoffs, AI is selectively displacing outsourced and standardized functions, especially in back-office and customer support roles. Internal teams are largely retained, with work shifting toward higher-order, judgment-intensive tasks. The report highlights an emerging transformation in organizational structures—from hierarchical pyramids to hybrid human–AI “pods”—underscoring the growing importance of reskilling and AI literacy.
Rethinking ROI beyond cost savings
A key contribution of the report is its reframing of AI ROI. Instead of focusing narrowly on headcount reduction or cost savings, the report proposes a five-dimensional ROI framework: time savings, productivity gains, cost efficiency, revenue growth, and strategic differentiation. Case studies from leading Indian enterprises demonstrate tangible business outcomes, including faster decision-making, improved customer experience, higher conversion rates, reduced downtime, and new AI-enabled business models.
These examples reinforce the report’s argument that AI is transitioning from a support tool to a growth engine. The real value of GenAI and Agentic AI emerges when use cases are scaled across departments and geographies, supported by disciplined measurement and executive sponsorship.
Sovereign AI and India’s strategic moment
Beyond enterprise adoption, the report situates AI within India’s broader strategic ambitions. It emphasizes the importance of Sovereign AI, highlighting national initiatives such as large-scale GPU infrastructure, shared datasets, and indigenous language models. India’s focus on small and domain-specific language models, particularly for vernacular and compliance-heavy use cases, is presented as a competitive advantage rather than a compromise.
The report argues that India’s massive and growing AI demand—already among the highest globally—creates a unique opportunity to build a domestic AI stack that balances openness with strategic self-reliance. Sovereign AI is framed not merely as a security imperative but as a pathway to long-term economic leadership.
Conclusion
Overall, The AIdea of India: Outlook 2026 presents a picture of cautious optimism grounded in real progress. Indian enterprises are moving decisively from experimentation to execution, driven by urgency, pragmatism, and growing confidence in AI’s business value. While challenges around governance, reliability, and integration remain, the momentum is unmistakable. The report concludes that India’s success with GenAI and Agentic AI will ultimately be measured not by speed of adoption alone, but by how thoughtfully AI is integrated into business, society, and national strategy—creating durable value for enterprises and the economy alike.
Note: IICA duly acknowledges the ownership / authorship of the report and re-publishing the same only for educational purpose of Independent Directors.
