Indian enterprises are reporting some of the highest financial losses from IT outages globally, even as they increase investments in monitoring and managing complex technology environments. A new report by New Relic found that Indian organisations lose an average of $3 million per high-impact outage, with 61% of respondents reporting such incidents weekly or more frequently.
The findings are part of New Relic’s 2026 Observability Forecast: India Edition, which surveyed 500 engineering and IT leaders and practitioners in India as part of a global study covering 2,575 respondents across 24 countries.
The report also highlights a growing gap between the adoption of advanced monitoring technologies and the operational challenges faced by enterprises. While Indian organisations are increasingly monitoring AI systems in production, rising outage frequency, fragmented technology stacks and longer recovery times continue to affect engineering productivity.
High outage frequency puts pressure on enterprise operations
According to the report, 61% of Indian organisations experience high-impact outages weekly or more frequently, while 31% report such incidents multiple times a day.
The average cost of a high-impact outage in India stands at $3 million. New Relic estimates the hourly cost of downtime at $2.43 million, or approximately $40,500 per minute.
The findings also point to longer detection and recovery times. The average time taken to detect a high-impact outage increased to 55 minutes in 2026, compared with 41 minutes in the previous year. The average time to resolve these incidents has also risen to more than an hour.
Third-party cloud failures, software updates and network disruptions were among the primary causes of outages identified in the report. Security failures were cited as a frequent cause of downtime by 32% of Indian respondents, nine percentage points higher than the global average.
Developer time lost to troubleshooting increases
The report found that Indian developers spend half their time addressing system disruptions, compared with 35% in the previous year’s survey. This is also higher than the global median of 30%.
The findings suggest that engineering teams are spending a growing share of their time responding to operational issues rather than developing and improving software.
New Relic attributed the challenges to the increasing complexity of enterprise technology environments, where teams must monitor multiple systems and identify the root causes of incidents across different infrastructure and applications.
OpenTelemetry adoption rises, but tool fragmentation persists
India reported a higher level of OpenTelemetry standardisation than other markets surveyed. According to New Relic, 42% of Indian respondents said they had fully standardised on OpenTelemetry, compared with 22% globally.
However, enterprises continue to operate with multiple monitoring tools. Indian organisations use an average of six tools for monitoring their technology environments, creating challenges in correlating data across systems.
Only 20% of Indian respondents said AI-assisted observability had significantly improved event correlation, compared with 27% globally.
The findings indicate that standardising telemetry alone may not be sufficient to improve incident detection and resolution when monitoring data remains distributed across multiple tools.
AI monitoring adoption rises alongside observability returns
The report found that 56% of Indian organisations actively monitor AI agents in production, compared with 35% globally. India also reported higher adoption of AIOps and machine learning model monitoring.
AIOps adoption stood at 54% in India, compared with 36% globally, while 57% of Indian respondents said they monitor machine learning models, against 38% globally.
The report also found that 35% of Indian respondents achieved a return of 3-5x on their observability investments, up from 19% in the previous year.
The share of organisations that had yet to realise a financial return or were not tracking ROI fell from 12% to 6%.
New Relic said organisations monitoring AI agents in production globally were more than twice as likely to achieve returns of at least 3x compared with those that did not monitor these systems.
Commenting on the findings, Rob Newell, senior vice president and general manager for APJ at New Relic, said that India’s rapid digital growth had increased the operational burden on engineering teams.
He added that fragmented monitoring tools continued to limit the benefits of observability investments, despite the growing adoption of AI monitoring.