Indian organisations are reporting stronger returns from artificial intelligence investments, but their ability to manage the risks and infrastructure demands of wider adoption is weakening, according to Kyndryl’s 2026 Readiness Report.
The report found that 60% of Indian organisations investing in AI and machine learning reported positive returns, up three percentage points from 2025. However, complete readiness to manage external risks fell eight percentage points to 27%.
AI adoption is moving beyond experimentation, with 85% of organisations deploying the technology in workflows beyond pilot projects. Yet scaling remains a challenge: 70% have more AI pilots than they can realistically scale, while 58% said innovation often stalls after the proof-of-concept stage. Nearly a third (31%) reported an AI investment failure in the past year.
Security is a major concern. Cyberattacks were identified as a leading external risk by 68% of Indian respondents, but only 35% said they were completely prepared to manage them. This comes even as three in four leaders said AI helps their organisations identify threats faster.
Infrastructure presents another constraint. While 71% of respondents described their IT infrastructure as mostly or fully modernised, 59% said significant re-architecture would be needed to support AI at scale. The report also found that 37% reported disagreement between their CHRO and CTO/CIO over AI strategy.
“As AI creates significant opportunity, organizations are now focusing on how to make early returns sustainable,” said Martin Schroeter, Chairman and CEO, Kyndryl. “This year’s Readiness Report shows a new kind of readiness gap: AI ambitions are moving faster than the systems needed to support them, and the bar for readiness keeps moving as AI becomes more integrated in enterprises. Our data shows that focusing on people, technology, and governance can help organizations win with AI and keep the ability to adapt as opportunities evolve.”
The findings are based on a survey of 3,700 senior business leaders across 21 countries, including 200 respondents in India.