Artificial Intelligence adoption is emerging as the top investment priority for CEOs in India, with 57 per cent planning to allocate 10 to 20 per cent of their budgets over the next year, according to the KPMG 2025 India CEO Outlook report.
Globally, 69 per cent plan to make similar investments over the next 12 months. A majority of leaders (73 per cent) expect returns on these investments within one to three years, while 86 per cent believe their boards are equipped to navigate advanced technology adoption, including leveraging AI and data for sustainable growth.
The report is based on responses from 1,350 CEOs worldwide, of which 125 were heads of Indian companies representing various industries.
"78 per cent of CEOs in India and 79 per cent globally cite that their leadership has a clear view on how AI will disrupt their business models and create new opportunities," the report added.
Amid global challenges such as tariffs and visa restrictions, 83 per cent of Indian CEOs are confident in their companies' growth prospects, up from 68 per cent in 2024.
Indian CEOs are ahead of their global peers on this front, as global CEO confidence increased from 76 per cent to 79 per cent during the same period.
The report further added that technology integration, particularly AI, is shaping short-term decision-making, with CEOs identifying cyber risks, workforce readiness, and successful AI integration as key factors influencing three-year growth.
"Nearly 75 per cent of CEOs in India cite that cybercrime can impact their organisations' prosperity. Considering the rising risks, 42 per cent of CEOs in India have increased investments in the space," the report said.
On talent acquisition and growth, 91 per cent of Indian CEOs emphasise investment in skill development and lifelong learning, while 74 per cent highlight AI workforce readiness as critical for organisational prosperity.
At the same time, 68 per cent of CEOs in India -- compared to 70 per cent globally -- agree that competition for AI talent could constrain their company's future prosperity.
Moreover, 26 per cent of CEOs in India, compared to 27 per cent globally, cited difficulty in finding candidates with the right mix of technical proficiency and collaborative skills, both essential for successful AI implementation.
Around 50 per cent of CEOs in India are also considering workforce reduction in some areas amid AI integration.
Sustainability and Environmental, Social, and Governance (ESG) goals are also being supported through AI, with CEOs noting that it can enhance data quality and reporting (75 per cent), improve resource efficiency (72 per cent), and reduce emissions (77 per cent).
"Nearly 77 per cent of CEOs in India, in alignment with 78 per cent globally, consider AI instrumental in reducing emissions and enhancing energy efficiency," the report added.
-- Rahul Goreja, Business Standard
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