India's enterprises are in the midst of a significant technology spending surge, with IT spending expected to grow 6%–8% in 2026, outpacing the 4%–6% increase expected among global peers. Spending has accelerated over the past 12–18 months and is expected to continue for the next 2–3 years, underscoring a structurally stronger investment cycle. Yet a clear gap remains between investment and value delivery, according to Bain & Company's India Enterprise Technology Report 2026.
The report is based on insights from more than 250 technology and business leaders across enterprises in India, spanning multiple industry segments. It captures how India’s technology decision-makers are navigating the next wave of AI-led enterprise technology transformation.
Indian enterprises are allocating a significantly higher share of their budgets toward long-term capability building. Capital expenditure accounts for 50%–60% of technology budgets in India, compared with 20%–30% globally, translating into technology capex that is 2.5-3x higher than their global counterparts. These investments are primarily directed toward AI platforms and data modernization (30% of capex), alongside core application modernization (25%), cloud and IT infrastructure (25%), and cybersecurity (20%), reflecting a clear pivot toward strengthening foundational capabilities.
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 & APAC Leader of the Technology Practice, Bain & Company. “At a time when AI is accelerating the pace of change, it is no longer only about modernizing technology stacks or addressing technical debt. Now is the time to go “future back” and reimagine the enterprise, zero-basing processes, redesigning operating models, and consequently, architecting an AI and Technology real estate that can expedite the journey.
Despite record levels of technology investment, many organizations still struggle to realize full value due to misalignment between business and IT, gaps in data and AI foundations, and legacy operating models. The winners will be those that shift to an outcome-led approach, where technology is measured by its impact on the business, not just delivery milestones.”
No surprise, AI is at the centre of this shift. Approximately 40% of 2026 technology budgets are expected to be allocated to change initiatives, with 40%–45% of that change spend focused on AI and data-led transformations, reflecting AI’s growing role in enterprise technology investments.
About 60% of CIOs will prioritize high-impact AI roadmaps, alongside application rationalization and data modernization, in the next 12 months. Together these priorities signal a clear shift toward strengthening core technology foundations. Cybersecurity modernization also emerged as a core focus for roughly half of the CIOs surveyed, reflecting the need to enable secure and scalable AI deployment.
Despite the spending surge, the report finds that only 15% of business leaders view IT as truly strategic, while 70% rate it as “good, but not great.” This gap warrants a rethink of the impact metrics used to measure the benefits of technology investments. There is a need to shift away from implementation milestone–based metrics and move toward more outcome-based measures linked to growth, efficiency, and profitability.
Approximately 72% of CIOs cite legacy tech debt as the top barrier to transformation, followed by skill shortages in next-gen domains (57%) and unproven ROI from new-age tech initiatives (49%). Approximately 90% of business leaders indicate that current data foundations and AI maturity are not sufficient to support enterprise-wide scale. Without a reset in operating models, data foundations, and talent strategies, India's current spending surge risks “creating the legacy tech of tomorrow.”
However, a clear path exists. Enterprises that adopt a “future-back” approach have the potential to unlock a step-change in value. This demands a fundamental rethinking of investments across technology architecture, data foundations, talent, operating models and governance, while continuing to execute today-forward priorities such as application modernization, AI enablement and cybersecurity. Leading organizations are already seeing meaningful impact, with the potential to achieve 15%-20% absolute EBITDA improvement, driven by a combination of revenue growth and efficiencies.
“An incremental, step-change approach to technology strategy will not help deliver maximum impact from AI investments. Technology CXOs must rethink their technology architecture, governance, operating model, skill mix and IT partner engagement models with a 'future-back' approach, fixing data platforms more effectively and driving execution with IT partners to achieve business outcomes rather than software delivery milestones. IT run operations, IT security, observability and reliability engineering need to cater to the new paradigm of AI agents, AI-powered security threats and fast-evolving quantum computing capabilities. We are now in a fundamentally different paradigm where all of these will be key to unlocking value at scale and sustaining the impact of technology investments.”, said Nagaraj Gn, Partner & Head of India Enterprise Technology, Bain & Company.
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