Data Quality Holds Back India's AI Dream: Over Half of Firms Struggle Currently, India matches Australia and New Zealand (ANZ) with about 20% of organisations having advanced AI capabilities. However, it still lags behind ASEAN, where 27% of enterprises have achieved this advanced stage

The promise of Artificial Intelligence (AI) hinges fundamentally on one critical factor—data. In India, however, a significant portion of valuable data remains trapped in outdated analog records. This issue has become a major obstacle, with 54 per cent of Indian organisations citing poor data quality as their most pressing challenge. This figure surpasses Australia and ASEAN, both at 40 per cent, and even the broader APAC average of 50.4 per cent.

Why is this so concerning? According to a recent IDC report "The AI Pivot: Accelerating GenAI Adoption and Unlocking Data-Driven Business Value," AI spending in India is projected to grow at an annual rate of 35 per cent, reaching USD 9.2 billion by 2028. This underscores an urgent need for improved data quality, governance, and cloud migration to fully realise India's AI ambitions.

Yet, challenges remain starkly evident. About 62 per cent of Indian organisations acknowledge the critical need to enhance their data governance and privacy policies. Moreover, a significant 28 per cent of Indian firms struggle with AI data bias, higher than ASEAN's 21.8 per cent and Australia's 20 per cent.

India: AI powerhouse?

India is quickly emerging as a global AI powerhouse, leading the APAC region, with 36 per cent of enterprises already using generative AI (GenAI) and an additional 46 per cent planning to invest within the next 12-24 months—the highest rate in APAC. Nevertheless, despite this enthusiasm, only 22 per cent of Indian companies report measurable improvements from AI and machine learning (ML), suggesting a gap between investment and outcomes.

Currently, India matches Australia and New Zealand (ANZ) with about 20 per cent of organisations having advanced AI capabilities. However, it still lags behind ASEAN, where 27 per cent of enterprises have achieved this advanced stage.

Even so, C-suite executives in India expect their AI investments to yield a substantial fourfold return within just one year, highlighting their strong confidence in AI's potential.

"GenAI is transforming industries across India—from ensuring compliance in retail and preventing fraud in finance to enhancing predictive maintenance in manufacturing," explained Deepika Giri, Associate Vice President at IDC Asia/Pacific. "However, to unlock AI's full potential, Indian organisations must prioritise trusted data, strong governance, and infrastructure readiness."

India leads ASEAN in public cloud adoption

Cloud migration emerges as another key enabler, with 51 per cent of Indian businesses already deploying AI solutions in the cloud. As AI investments escalate, an overwhelming 80 per cent of organisations view cloud migration as indispensable. Notably, India leads ASEAN (the Association of Southeast Asian Nations) in public cloud adoption, with 40 per cent of enterprises using one or more public cloud platforms compared to ASEAN's 31 per cent.

Additionally, 30 per cent of Indian enterprises prefer a hybrid cloud approach, significantly outpacing Australia's 19 per cent.

"Indian organisations recognise cloud adoption as a crucial step towards AI success," said Varun Babbar, Vice President, India, at Qlik. "To scale AI-driven innovation, businesses need robust, scalable data infrastructure. At Qlik, we assist organisations in enhancing data integrity, reducing bias, and reinforcing compliance frameworks, ensuring AI delivers meaningful and lasting business value."