TLDR: A new KPMG report reveals that Indian CEOs are heavily investing in AI, with over half planning to allocate 10-20% of their budgets to AI initiatives. However, this enthusiasm is tempered by significant cybersecurity concerns, particularly identity theft and data privacy, which 89% of CEOs identify as top threats. The report also highlights a critical lag in regulatory reforms for AI in India, raising questions about the security and ethical governance of rapid AI integration.
Indian business leaders are demonstrating a strong commitment to Artificial Intelligence (AI) integration, yet their optimism is accompanied by growing concerns over cybersecurity, with identity theft emerging as the paramount risk, according to KPMG’s 2025 India CEO Outlook report. The global survey, which included 125 Indian CEOs among 1,350 participants worldwide, underscores a dual narrative of aggressive AI adoption and a pressing need for robust security frameworks and regulatory clarity.
Nearly 89% of Indian CEOs have identified identity theft and data privacy as the most critical cybersecurity threats directly linked to AI. This highlights a significant challenge as companies increasingly embed AI into their operations. The report indicates that AI is no longer viewed as a futuristic advantage but as an unavoidable pressure point that can generate both value and risk.
Investment in AI is a top priority for Indian CEOs, with 65% stating AI integration is a key investment area, slightly below the global average of 71%. More than half of these leaders intend to dedicate between 10% and 20% of their annual budgets to AI initiatives this year.
Despite the strong enthusiasm, a substantial 76% of Indian CEOs believe that policy reform is lagging behind the pace of technological advancement, and 62% are concerned about ethical risks such as bias and misinformation inherent in AI systems. This suggests that ‘India Inc is automating faster than it is governing,’ as observed by KPMG. The current regulatory landscape, including the Digital Personal Data Protection Act, addresses privacy but leaves algorithmic oversight largely unresolved. The proposed Digital India Act, intended to anchor emerging tech regulation, is yet to be notified, creating a gap that could impede the scaling up of AI initiatives.
Cybercrime is seen as a direct threat to organizational prosperity by approximately 75% of Indian CEOs, leading 42% to increase their investments in cybersecurity. Beyond technology and security, the human element remains crucial. A significant 91% of Indian CEOs emphasize investment in skill development and lifelong learning, with 74% highlighting the critical importance of AI workforce readiness. However, around half of Indian CEOs are considering workforce reductions in certain areas as AI becomes more integrated into their operations.
Furthermore, many CEOs recognize AI’s potential beyond efficiency and cost-cutting, with 77% considering it instrumental in reducing emissions and achieving Environmental, Social, and Governance (ESG) goals. Yezdi Nagporewalla, CEO of KPMG in India, commented on the situation, stating, ‘In an era of global uncertainty, CEOs in India are demonstrating remarkable resilience and a future-focused mindset. By embracing emerging technologies like AI, prioritising cybersecurity, and advancing ESG goals, they are confident of navigating complexity.’
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This comprehensive outlook from KPMG underscores the urgent need for India’s regulatory framework to evolve at a pace that matches the country’s ambitious AI investment and adoption strategies, ensuring both innovation and security in the digital age.
