New Delhi, May 7 -- Indian enterprises are entering one of their strongest technology investment cycles in years, with chief information officers (CIOs) accelerating spending on AI, data modernisation and cybersecurity even as legacy systems and weak business alignment threaten to slow transformation efforts, according to a new report by Bain & Company.
The consultancy's India Enterprise Technology Report 2026 said IT spending in India is expected to grow 6-8% in 2026, outpacing the projected 4-6% growth among global peers and signalling a structurally stronger investment cycle for India Inc.
The report, based on insights from more than 250 technology and business leaders across sectors, found that nearly 60% of CIOs will prioritise high-impact AI roadmaps, application rationalisation and data modernisation over the next 12 months as enterprises prepare for large-scale AI deployment.
AI and data-led transformation alone are expected to account for 40-45% of all change-related technology spending in 2026, highlighting how generative AI is rapidly becoming central to enterprise technology strategy.
Indian enterprises are also allocating 50-60% of their technology budgets toward capital expenditure-well above the 20-30% global average-as organisations invest heavily in foundational upgrades spanning AI platforms, cloud infrastructure, enterprise applications and cybersecurity.
According to Bain, nearly 30% of capex spending is being directed toward AI platforms and data modernisation, while application modernisation and cloud infrastructure each account for roughly 25% of investments. Cybersecurity makes up the remaining 20%.
"Indian enterprises are entering a new phase of technology investment where the focus is shifting from how much is being spent to how effectively that spend creates business value," said Sandeep Nayak, Partner and APAC Leader of the Technology Practice at Bain & Company.
The report highlights growing pressure on CIOs to move beyond technology deployment and demonstrate measurable business outcomes tied to productivity, operational efficiency and profitability.
Despite record levels of enterprise technology spending, only 15% of business leaders currently view IT as "truly strategic", while nearly 70% describe enterprise IT functions as "good, but not great", reflecting a widening gap between technology investments and realised business value.
At the same time, structural challenges continue to weigh on enterprise transformation. Nearly 72% of CIOs identified legacy tech debt as the biggest barrier to transformation, followed by shortages of next-generation AI and cloud talent at 57%, and unproven ROI from emerging technology initiatives at 49%.
Almost 90% of business leaders surveyed said their organisations still lack sufficiently mature data foundations and AI readiness to support enterprise-wide transformation at scale.
The findings align with broader industry projections around enterprise AI adoption. Market research firm Gartner has forecast global IT spending to surpass $5.7 trillion in 2026, driven by generative AI infrastructure, cloud services and enterprise software demand. Meanwhile, IDC has projected strong growth in AI and cloud spending across Asia-Pacific, with India emerging as one of the fastest-growing enterprise AI markets.
Separately, Deloitte has noted that Indian enterprises are increasingly shifting from AI experimentation toward scaled deployment, with CIOs now being evaluated on business value creation rather than technology implementation alone.
Bain said enterprises adopting a "future-back" transformation strategy-rearchitecting operating models, governance, talent and technology stacks around AI-native systems-could potentially unlock 15-20% absolute EBITDA improvement through a combination of revenue growth and operational efficiencies.
Published by HT Digital Content Services with permission from TechCircle.