India’s enterprises are rapidly increasing technology investments, with artificial intelligence and data modernisation emerging as the biggest growth drivers for 2026, according to a new report by Bain & Company.
The report stated that overall IT spending in India is expected to grow by 6-8% in 2026, ahead of the projected global growth rate of 4-6%. It also highlighted that nearly 40% of enterprise technology budgets will be allocated to change initiatives, with 40-45% of that spending focused on AI and data-led transformation projects.
Indian companies are now prioritising long-term digital capability building over short-term upgrades. Around 50-60% of technology budgets are being directed towards capital expenditure, significantly higher than the global average of 20-30%. A major portion of these investments is going into AI platforms, data modernisation, cloud infrastructure, and core application upgrades.
The report, based on inputs from more than 250 technology and business leaders across sectors, found that organisations are strengthening core digital systems to prepare for large-scale AI adoption. It noted that nearly 60% of CIOs plan to prioritise AI roadmaps, application rationalisation, and data modernisation over the next 12 months.
However, the study also pointed out that many businesses are still struggling to generate measurable business outcomes from their technology investments. According to the findings, only 15% of business leaders currently view IT as a truly strategic function, while 70% rated it as “good, but not great.”
Legacy systems continue to remain a major challenge. Around 72% of CIOs identified legacy technology debt as the biggest barrier to digital transformation, followed by skill shortages and concerns around unclear returns from emerging technology initiatives.
Sandeep Nayak, Partner & APAC Leader of the Technology Practice at Bain & Company, said companies now need to rethink their technology strategies in the AI era. “At a time when AI is accelerating the pace of change, it is no longer only about modernising technology stacks or addressing technical debt. Now is the time to go ‘future back’ and reimagine the enterprise,” he said.
The report added that companies adopting a “future-back” strategy could unlock 15-20% absolute EBITDA improvement through higher efficiency and revenue growth.
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