Key Points
- 78 per cent of Indian CEOs prioritise AI investment, matching global average of 79 per cent
- 52 per cent plan workforce cuts in some areas while 92 per cent expect overall headcount growth
- Cybersecurity ranks as top threat to growth for 38 per cent of Indian business leaders
More than half of Indian chief executive officers are planning workforce reductions in some business areas even as they expect overall hiring to increase, according to KPMG‘s 2026 India CEO Outlook released in October. The survey of 125 Indian CEOs found that companies are simultaneously investing in artificial intelligence, reassessing existing roles and recruiting people with new technological skills.
The report found that 78 per cent of Indian CEOs consider AI a top investment priority, broadly matching the global figure of 79 per cent. However, 52 per cent of Indian respondents are planning workforce cuts in certain areas, up from 50 per cent in 2025, even as 92 per cent expect their organisations’ total headcount to grow over the next three years.
KPMG’s twelfth annual CEO Outlook surveyed 1,400 CEOs across 12 markets between 11 August and 21 September 2026. All respondents lead companies with annual revenues exceeding $500 million.
The findings point to a restructuring of work rather than net job losses. About 86 per cent of Indian CEOs are reviewing the skills required for entry-level positions, compared with 76 per cent globally. The proportion prioritising retention and retraining of high-potential employees rose to 87 per cent from 70 per cent last year.
Business confidence remains high. About 87 per cent of Indian CEOs expressed confidence in their companies’ growth prospects over the next three years, up from 83 per cent in 2025. Globally, confidence increased to 84 per cent from 79 per cent.
AI investment and implementation
The survey found that 62 per cent of Indian CEOs expect to allocate between 11 and 20 per cent of their budgets to AI over the next 12 months. About 70 per cent expect returns on these investments within one to three years.
Nearly 97 per cent of Indian respondents said their companies could keep pace with AI developments and their implications for business operations. However, confidence in understanding the technology’s wider business implications was lower, with 75 per cent of Indian CEOs saying their leadership teams understood how AI would disrupt existing business models.
Adoption of agentic AI, which refers to software systems that can execute tasks and workflows with varying degrees of autonomy rather than simply responding to prompts, is also gaining attention. According to the survey, 46 per cent of Indian CEOs said agentic AI was already having a significant or transformational impact on their organisations, compared with 55 per cent globally.
Purushothaman KG, partner and head of AI and technology transformation at KPMG in India, said the next phase of AI would be defined by an “organisation’s ability to translate investment into measurable value”. This would require companies to strengthen governance, data infrastructure, workforce capabilities and cybersecurity, he said.
Barriers to deployment
The survey identified several barriers to enterprise-wide AI implementation. Ethical challenges emerged as the leading concern, cited by 64 per cent of Indian CEOs compared with 57 per cent globally.
Regulatory complexity was another significant issue. About 53 per cent of Indian respondents identified inconsistent regional AI regulations as an implementation challenge, substantially higher than the global figure of 41 per cent. Additionally, 70 per cent of Indian CEOs said the pace of AI regulation could impede organisational success.
Data sovereignty requirements present challenges for 50 per cent of respondents in both India and the global sample. Implementation costs remain a concern for 51 per cent of Indian respondents, while 53 per cent identified difficulties integrating AI with existing security infrastructure.
Cybersecurity as top threat
Cybersecurity and data security emerged as the leading threats to business growth, cited by 38 per cent of Indian CEOs. Global economic uncertainty and geopolitical instability followed, each identified by 28 per cent of respondents.
In response, 49 per cent of Indian CEOs are increasing investment in cybersecurity and digital-risk resilience, compared with 45 per cent globally. Another 34 per cent are prioritising AI integration across operations, while 33 per cent are directing additional investment towards regulatory compliance.
About 97 per cent of Indian CEOs expressed concern about fraud detection and prevention. Identity theft and data privacy concerned 96 per cent of Indian respondents, while 87 per cent expressed concern about vulnerability to cyberattacks.
By the numbers
Key figures from this story- 78%
- Indian CEOs prioritising AI investment
- 52%
- Indian CEOs planning workforce cuts in some areas
- 92%
- Indian CEOs expecting overall headcount growth
The report identified additional security risks arising from agentic AI deployment, including expanded attack surfaces and new identity and access management requirements.
Mohit Bahl, partner and head of risk and integrity advisory, KPMG in India, said risk management was evolving from an operational necessity into a strategic leadership imperative. Boards and executive teams should consider integrating risk management, resilience and governance more closely with investment and growth decisions, he said.
Talent availability remains a significant concern for Indian businesses. About 54 per cent of CEOs identified attracting and retaining employees as a major workforce challenge, followed by skills gaps at 53 per cent and AI-related employee training at 51 per cent.
Indian businesses are adopting different approaches to workforce preparation. About 48 per cent of CEOs are prioritising organisation-wide AI education, while 44 per cent are focusing on role-specific training. Nearly 79 per cent said AI was changing how their organisations train and develop staff.
On economic outlook, confidence in India’s growth prospects increased to 73 per cent from 71 per cent in 2025. Advancing digitisation and connectivity was the leading operational priority for 26 per cent of Indian CEOs, compared with 20 per cent globally.
Your Questions, Answered
What percentage of Indian CEOs are prioritising AI investment?
According to KPMG's 2026 India CEO Outlook, 78 per cent of Indian CEOs consider AI a top investment priority, broadly matching the global figure of 79 per cent.
Are Indian companies planning job cuts due to AI adoption?
About 52 per cent of Indian CEOs are planning workforce reductions in some business areas. However, 92 per cent expect their organisations' overall headcount to increase over the next three years, suggesting restructuring rather than net job losses.
What is the biggest threat to Indian businesses according to CEOs?
Cybersecurity and data security emerged as the leading threat to business growth, cited by 38 per cent of Indian CEOs. Global economic uncertainty and geopolitical instability followed at 28 per cent each.
How much are Indian companies spending on AI?
The survey found 62 per cent of Indian CEOs expect to allocate between 11 and 20 per cent of their budgets to AI over the next 12 months, with 70 per cent expecting returns within one to three years.
