World Bank: Only 23 in 100 Indian Formal Firms Use AI
The World Bank's October 2026 India Development Update finds only 23% of surveyed formal firms use AI, about a third of the US level, even as private AI investment hit $4.1 billion in 2025.
India gets a lot of attention for AI investment. The World Bank's October 2026 India Development Update looks at the other side, which is how many companies actually use the technology. Its answer: only 23% of surveyed formal firms in India use AI. That's about a third of the US level.
The money is there
Capital isn't what's holding things back. Private AI investment in India went from $1.2 billion in 2024 to $4.1 billion in 2025, up 242%. Global Capability Centres employed 2.36 million people in 2025, against 1.9 million a year earlier. A World Bank official put India among the top 10 emerging-market performers on AI readiness.
The report also separates actual annual investment from the big pledges. Reliance's $110 billion over seven years and Adani's $100 billion by 2035 are multi-year plans for data centres and compute. They aren't money already spent on AI in a given year.
Why the Bank thinks India can catch up
It points to three things India already has: a large technical workforce, an IT sector plugged into global markets, and digital public infrastructure. It ties DPI directly to AI adoption in business and public services. The condition is that skills, innovation and privacy safeguards develop together.
The report doesn't promise much on outcomes. It makes no forecast that AI will raise growth or cut jobs, and calls the long-term effect on the economy and labour market uncertain.
Small AI over frontier models
For most of South Asia, the World Bank says the bigger gains come from adopting AI and adapting it to local conditions, not from building frontier models. It calls this "small AI": targeted tools that work in low-resource settings. Its recommendations are to lower the barriers for small firms and to set a clear regulatory framework that reduces uncertainty and protects data and privacy.
The question for enterprise leaders
The 23% figure is a fair test for any large Indian company. How many of your AI pilots are now part of a production process with a number attached to them? Are your suppliers and smaller partners using AI at all, or does adoption stop at your own walls? And is more of your budget going to compute and announcements than to changing how work actually gets done?
Source: MediaNama — World Bank: Only 23% of surveyed Indian formal firms use AI despite rising investment