Indian companies are increasingly turning to Generative AI (GenAI) to maintain their competitive advantage in an era of rapid technological advancement. According to Deloitte’s State of Generative AI Report (India Perspective), Indian organizations are prioritizing innovation through AI, driven by both internal and external pressures. The report highlights that more than 95% of respondents feel compelled to adopt GenAI to stay ahead in their industry.
Balancing price and performance
Unlike their global counterparts, Indian companies are very price sensitive when integrating GenAI. Nearly 50% of Indian respondents cited price as the most important factor in adopting GenAI models, followed by model performance and flexibility. Globally, companies are focusing more on performance and trust, making pricing a secondary concern. This demonstrates the unique challenge Indian companies face in balancing innovation and affordability in a cost-conscious market.
Increasing optimism about the impact of GenAI
The report reveals strong optimism among Indian companies about the transformative potential of GenAI. Nearly 89% of respondents are confident that GenAI will transform their organizations within the next three years, while 70% expect changes within one to three years. Furthermore, 48% of respondents believe that their entire industry will be transformed by AI in the near future, underscoring the sense of urgency across industries to accelerate adoption.
Preparation and gaps
Despite advances in areas such as data management, strategy and technical infrastructure, where more than 40% of companies report high levels of readiness, significant gaps still remain in risk management, governance and talent development. Only 25% of participants admitted to being well prepared in these critical areas. This indicates that while many companies are ready to deploy AI technologies, they must address internal challenges to fully realize their potential.
Increasing productivity and efficiency
Productivity improvements are a key driver for GenAI adoption, with 42% of companies highlighting improved efficiency as the key benefit of their initiatives. This is in line with initial expectations, with 61% of respondents citing productivity gains as the top desired outcome of GenAI projects. Companies are also focusing on integrating GenAI into their functions and processes, with 34% of respondents indicating that deep integration is crucial to unlocking its value.
Challenges that hinder adoption
Despite the growing interest in GenAI, certain barriers are slowing down adoption. Concerns about data privacy and security are prominent, with 68% of respondents highlighting issues related to the use of sensitive data in AI models. Additionally, companies with less AI expertise struggle to acquire talent and develop skills, while those with more experience face challenges in effectively implementing AI solutions.
Investment Trends
Although investments in GenAI are increasing, they remain a relatively small part of total AI budgets. More than 50% of organizations surveyed currently spend less than 20% of their total AI budget on GenAI, with the majority of investment focused on data management, cloud capabilities and AI/ML improvements.
