AI investments see more than twofold rise in 2025 in India

Organisations in India are set to ramp up their investments in artificial intelligence, with AI spending expected to grow 2.7 times in 2025, of overall IT spends, according to the Lenovo-IDC CIO Playbook 2025 survey.

At the forefront of this surge is generative AI, which is projected to command 43% of overall AI implementation spends next year, the report reveals.

In terms of function-wise adoption, sales takes the lead in GenAI deployments across Indian enterprises. Marketing follows closely as the second most active area, while software development ranks third, highlighting the growing role of AI in both customer-facing and backend functions.

The reason Indian organisations, particularly those in BFSI (Business, Financial Services, and Insurance), Retail, Manufacturing and healthcare, are focusing on streamlining back-end operations when investing in GenAI is because these are directional to their low-hanging and short-term outcomes and fruits. “It's IT operations and those areas that they look at low-hanging fruit where they want to go. They're looking at certain IT OPS. It could be in HR, sales, bringing in efficiency. There are some organisations that are actually going into loss prevention,” Sumir Bhatia, President, Asia Pacific Infrastructure Solutions Group, Lenovo, told Fortune India.

Despite rising investments, AI adoption in India is still at a nascent stage. Nearly 49% of organisations are either evaluating or planning to implement AI within the next 12 months. This trails the Asia Pacific average of 56% and matches the global average of 49%. A key hurdle slowing down adoption is uncertainty around return on investment, which continues to be a critical factor in decision-making.

Interestingly, even as organisations in India plan to increase their AI investments, the optimism around returns remains strong. Enterprises across the Asia Pacific region, including India, expect an average return on investment (ROI) of 3.6 times from their AI initiatives.

“AI adoption is not just about the short-term gains. Organisations need to invest in the efficiency of the design, deployment and integration of AI solutions to their operations that enable tracking of the impact. Professional AI services play a key role here and help organisations successfully adopt AI through outcome-led approach,” said Fan Ho, Executive Director and General Manager, Solutions and Services Group, Lenovo Asia Pacific.

The survey also highlights a clear trend in AI solution development that only a small segment of organisations—typically those with significant resources—will "build" custom AI models from scratch, such as large language models (LLMs). The majority will adopt a "compose" approach, blending fine-tuning, prebuilt tools, and modular architectures. This composable strategy, especially for GenAI, enables quicker time-to-value and allows businesses to tailor AI capabilities to their specific needs while maintaining flexibility for future innovation.

The global study received responses from 2,900+ respondents, including 900+ IT and business decision-makers (ITBDMs) from 12 AP markets.