Over 70% of Indian Firms Investing in GenAI, but Only 23% ave Governance Frameworks: CII-Protiviti Report

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New Delhi: Indian enterprises are accelerating their adoption of artificial intelligence (AI) at an unprecedented pace, with 74 per cent of organizations already investing in Generative AI (GenAI) and Large Language Models (LLMs), particularly in financial services, where adoption stands at 85 per cent.

However, only 23 per cent of enterprises have implemented AI ethics and governance frameworks, according to the latest report by the Confederation of Indian Industry (CII) and Protiviti.

Titled AI Trends and Future Impact: Industry Adoption & Insights, the report was launched at the 4th edition of the International Conference on Artificial Intelligence – The AI India Show 2025.

The findings suggest that while a majority of organizations are gearing up for AI-led transformation, significant challenges remain, particularly in AI governance, ethics, and skilled workforce availability.

The report sheds light on sector-specific AI applications, investment priorities, and readiness levels among enterprises.

Also read – ‘GenAI Works Best when it Augments Human Capabilities to Deliver Efficient Outcomes’: Mandar Vanarse, CTO & Board Member, QX Global Group

AI Adoption Accelerating Across Industries

The survey indicates that 59 per cent of Indian enterprises consider themselves either fully or moderately prepared for AI adoption, while 38 per cent are still in the early stages.

The financial services sector leads the charge, leveraging AI for fraud detection, algorithmic trading, and risk assessment. Meanwhile, healthcare, retail, and manufacturing are also seeing widespread AI integration.

AI-driven customer service operations, HR and talent management, and product development are emerging as the top areas where businesses plan to implement AI-driven solutions. The increased adoption is driven by key business objectives such as operational efficiency (74 per cent), enhanced customer experience (66 per cent), and improved decision-making (54 per cent).

Governance and Ethical Challenges Lagging Behind

Despite the enthusiasm for AI adoption, the report highlights a glaring gap in AI governance. Only 23 per cent of enterprises have implemented AI ethics and governance frameworks, leaving the majority vulnerable to risks related to bias, transparency, and accountability.

Ethical concerns, including risks of bias and legal non-compliance, were ranked as the top barriers to AI adoption, followed by lack of skilled workforce (51 per cent) and high implementation costs (39 per cent).

More than 80 per cent of businesses acknowledge the need for responsible AI practices and have started conducting bias audits, external reviews, and leveraging explainable AI tools. However, a significant proportion of organizations are still in the process of formulating clear governance strategies.

Investment in GenAI and Agentic AI Rising

AI investments are set to rise, with businesses increasingly focusing on advanced AI technologies. According to the report, 74 per cent of organizations are already considering Gen AI and Large Language Models (LLMs) for business transformation, particularly in the financial services sector, where adoption stands at 85 per cent.

Agentic AI, which enables autonomous decision-making, is also gaining traction, with 58 per cent of businesses exploring its potential. Companies are in the process of identifying high-value AI use cases that could drive efficiency, accuracy, and return on investment (ROI).

Also read – IndiaAI Mission Empanels 18,693 GPUs to Strengthen AI Research and Development: IT Minister

Sector-Wise AI Impact

AI’s transformative impact is evident across multiple industries:

Financial Services: AI-driven fraud detection, risk analysis, and personalized banking services are enhancing security and efficiency.
Healthcare: AI-powered diagnostics, predictive analytics, and personalized medicine are improving patient care and treatment outcomes.
Retail & Consumer: AI is revolutionizing supply chain optimization, dynamic pricing, and personalized shopping experiences.
Automotive: AI is driving the shift towards autonomous vehicles, predictive maintenance, and smart manufacturing.
Manufacturing & Industrial Products: AI-driven automation, robotics, and predictive maintenance are reducing downtime and enhancing production.
Telecommunications, Media & Technology: AI-powered content personalization, automated customer support, and network optimization are transforming digital experiences.

Path Forward: Bridging the AI Readiness Gap

The report underscores the need for businesses to invest in AI literacy, workforce reskilling, and ethical AI frameworks to maximize AI’s potential.

While the trajectory for AI adoption in India is strong, sustained success will depend on a collaborative approach between policymakers, industry leaders, and academia to ensure responsible and inclusive AI deployment.

Sandeep Gupta, Managing Director, Protiviti Member for India:

“AI is reshaping the world, and India is at the forefront of this shift. With rapid digital adoption, businesses are integrating AI at an accelerated pace, driving economic growth. Encouragingly, over 74 per cent executives are considering GenAI as one of the critical business imperative and more than 80 per cent are carrying out multiple auditability measures such as, Biasness Audits, AI Governance Framework or Explainable AI tools, demonstrating a commitment to responsible AI. As AI becomes more cost-effective, its transformative impact will redefine industries and spur innovation. Protiviti collaborated with CII to deliver key insights into India’s AI landscape through the AI Trends and Future Impact report, which we launched at the – 4th edition of the International Conference on AI – The AI India Show 2025.”

Vinay Patil, Joint Director, C-DAC:

“Over the past two years, AI has become a strategic tool for CDAC. It aids in our decision-making and fastens innovation. From content generation to chatbots to automated workflows, AI does it all. With growing regulatory oversight, AI governance frameworks have been strengthened to ensure responsible AI usage. If one takes an overall industry-wide view, organizations are moving toward real-time decision intelligence and large-scale AI automation. As AI and humans intersect, it ushers in a range of benefits – from better customer service to greater internal collaboration. I see that the fusion of AI with quantum computing and reinforcement learning is expected to drive further innovations in the industry.”

Sampath Manickam, Chief Technology Officer NSE India:

“As a technologist, I view AI as a transformative force in enhancing business processes and productivity. However, I advise focusing on experimenting with AI in the development lifecycle, improving customer experience, and enhancing efficiency first before attempting core production areas. AI is evolving rapidly. It is crucial that AI systems are responsibly governed and architected to prevent misuse. Organizations must ensure they possess the right skills, strategies, and regulatory compliance measures for AI success. This approach will ensure measurable business value from AI. Even small AI-driven interventions can create significant business impacts. The regulator has emphasized the importance of regulatory compliance in AI usage in their recent consultation white paper on AI tools responsibility. It highlights the need for responsible AI governance, ensuring transparency and accountability in AI applications. This regulatory framework aims to protect investor interests and maintain market integrity while leveraging AI’s potential.”

Pratik Jain, General Manager at Vodafone Idea:

“Achieving seamless data centre operations and 100 per cent uptime is a critical challenge in the telecom industry. Given this backdrop, integrating AI has had a significant improvement in customer activation and streamlining onboarding processes. AI also plays an important role in detecting and resolving infrastructure and application abnormalities. For instance, by implementing auto-healing capabilities, we have eliminated the need for manual intervention, allowing systems to self-repair in real-time. This has enhanced system resilience and operational efficiency. In our industry, managing sudden traffic bursts is a major challenge and here AI helps and ensures smooth business operations.”

As AI continues to evolve, Indian enterprises are poised to become global leaders in AI-driven innovation. However, addressing governance gaps, ethical considerations, and infrastructure constraints will be critical to ensuring AI’s long-term benefits for businesses and society at large.