New Delhi, May 7 (AHN) India's enterprises are seeing a significant technology spending surge, with IT spending expected to grow up to 8 per cent in 2026, with AI and data transformation expected to drive 40–45 per cent of change-related tech expenditure, a report said on Thursday.

The report by Bain & Company said India’s IT spending growth is expected to outpace the 4-6 per cent increase projected for global peers.

Spending has accelerated over the past 12–18 months and the trend is expected to continue for the next 2–3 years, underscoring a structurally stronger investment cycle.

A clear gap, however, remains between investment and value delivery, the report said, based on responses from over 250 technology and business leaders across India.

Indian enterprises are allocating a significantly higher share of their budgets toward long-term capability building, especially in AI platforms and data modernisation. Capital expenditure accounts for 50–60 per cent of technology budgets in India, compared with 20–30 per cent globally.

AI platforms and data modernisation accounted for 30 per cent of the capex spending of Indian firms.

Core application modernisation (25 per cent), cloud and IT infrastructure (25 per cent), and cybersecurity (20 per cent), accounted for a major share of tech spending, reflecting a clear pivot toward strengthening foundational capabilities.

As AI accelerates the pace of change, it is time to reimagine the enterprise, zero-basing processes, redesigning operating models, and consequently, architecting an AI and Technology real estate that can expedite the journey, said Sandeep Nayak, Partner & APAC Leader of the Technology Practice, Bain & Company.

“Despite record levels of technology investment, many organisations still struggle to realise full value due to misalignment between business and IT, gaps in data and AI foundations, and legacy operating models,” Nayak said.

Around 40 per cent of 2026 technology budgets are expected to be allocated to change initiatives, with AI and data-led transformations accounting for nearly half of it, the company said.

About 60 per cent of CIOs will prioritise high-impact AI roadmaps, alongside application rationalisation and data modernisation, in the next 12 months, it is forecasted.

Nearly 72 per cent of CIOs cited legacy tech debt as the top barrier to transformation, followed by skill shortages in next-gen domains (57 per cent) and unproven return on investments from new-age tech initiatives (49 per cent).

Approximately 90 per cent of business leaders indicated that current data foundations and AI maturity are not sufficient to support enterprise-wide scale.

—AHN

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