The accelerating momentum of artificial intelligence (AI) adoption in India is unmistakable. According to a new study by Lenovo and IDC, generative AI (GenAI) is expected to account for 43% of India’s total AI spending by 2025. While investment appetite is robust, challenges such as governance, infrastructure limitations, and the need for strategic deployment remain at the forefront. As organisations in India navigate this transformative wave, the focus is clearly shifting toward responsible, scalable, and hybrid AI infrastructures. The next chapter for India's digital economy hinges not just on adoption—but on doing it right.

India’s AI Investment: Ambitious, But Cautious

India’s AI spending is poised for a remarkable surge, forecasted to grow by 2.7 times between now and 2025, according to Lenovo’s "It’s Time for AI-nomics" study, based on IDC research across 12 Asia Pacific markets.

However, enthusiasm is tempered by reality. 49% of Indian organisations are either evaluating or planning AI initiatives within the next 12 months, slightly trailing the Asia Pacific (APAC) regional average of 56%. This gap underscores the relatively early stage of India's AI maturity, despite the strong investment trajectory.

GenAI’s Rising Share in AI Spend

The data points to a decisive trend: Generative AI is set to dominate. By 2025, GenAI is projected to capture 43% of total AI expenditure in India, reflecting its transformative potential across industries—from content creation to code development.

Indian enterprises, however, are approaching GenAI investments with pragmatism. Expectations are set high, with organisations targeting a 3.6x return on AI investments. This demands not only innovation but measurable outcomes, steering firms toward carefully vetted and outcome-led deployments.

Governance, Risk, and Compliance: Now at the Forefront

In a telling shift, Governance, Risk, and Compliance (GRC) has leapfrogged 12 positions to become the top priority for APAC CIOs heading into 2025, according to the Lenovo study.

Yet, the implementation gap is striking: only 19% of Indian CIOs report having fully developed AI governance frameworks. Ethical concerns, potential bias in algorithms, and data privacy challenges remain formidable barriers to adoption.

Sumir Bhatia, President of Lenovo’s Infrastructure Solutions Group for Asia Pacific, succinctly captures the sentiment:
“Secure and responsible AI is now non-negotiable.”

Leading Use Cases: Sales, Marketing, and Beyond

In India, sales applications have emerged as the primary use case for AI, with marketing and software development following closely behind. In contrast, across broader APAC markets, AI is more heavily leveraged for IT operations, cybersecurity, and software development.

This divergence highlights India’s focus on revenue-generation and customer-facing AI applications, signaling a commercially-driven adoption path compared to more operational uses elsewhere in the region.

Infrastructure Preferences: The Hybrid Revolution

Infrastructure choices are evolving in tandem with security and control priorities. 63% of Indian organisations now favour hybrid and on-premise AI models, compared to a global average of 65%.

Amit Luthra, Managing Director of Lenovo ISG India, emphasized:
“Hybrid architectures offer the best of both worlds—scalability and control.”

Organisations are increasingly unwilling to trade off latency, compliance, and sovereignty for cloud convenience alone, especially in AI deployments where sensitive data is involved.

AI-Powered PCs: Early Gains and Expanding Adoption

A quieter but equally important revolution is underway at the device level. In the Asia Pacific region, 43% of organisations report productivity improvements from early adoption of AI-powered PCs.

In India, over half of surveyed organisations are actively planning to embrace AI-enhanced PCs, viewing them as enablers of real-time decision-making and operational efficiency.

The Professional Services Angle: Closing the Skills Gap

Another notable finding: 29% of Indian CIOs already leverage professional AI services, and an additional 54% plan to explore such services in the near future.

This rising dependence on external expertise reflects an acute skills shortage internally and a preference for outcome-based AI adoption strategies. Fan Ho, Executive Director at Lenovo’s Solutions and Services Group Asia Pacific, summed it up well:
“Professional AI services are essential to transform ambition into execution.”

Strategic Takeaways: Charting a Responsible AI Future

For business leaders and investors, the implications are clear:

• AI in India is shifting from experimentation to operational necessity, with GenAI leading the charge.
• Governance and ethical AI will define competitive advantages in the years ahead, not just technological prowess.
• Hybrid infrastructure strategies will dominate, marrying cloud flexibility with local control and security.
• Organisations embracing professional services and AI-powered tools early will likely achieve faster, more sustainable ROI.