Poor data quality and governance challenge India’s AI ambitions

More than half of Indian enterprises see poor data quality as a major barrier to achieving success with artificial intelligence (AI), according to new findings from a research paper released by International Data Corporation (IDC) and commissioned by Qlik. The report indicates that 54% of organisations in India struggle with data quality, the highest rate across the Asia-Pacific (APAC) region, signalling a critical gap between AI ambition and real-world execution.

The IDC InfoBrief, The AI Pivot: Accelerating GenAI Adoption and Unlocking Data-Driven Business Value, also reveals that while India is leading in Generative AI (GenAI) investment plans across APAC, only 22% of organisations in the country report measurable outcomes from their current AI and Machine Learning (ML) deployments.

India’s AI Investments Face Quality Constraints

India is projected to spend USD 9.2 billion on AI by 2028, growing at a compound annual growth rate of 35%. With 36% of enterprises already using GenAI and 46% planning to invest in it over the next 12 to 24 months, the country is positioning itself as a potential AI powerhouse. However, the challenges associated with data quality, governance, and bias are slowing progress.

The study compares India's 54% rate of data quality concerns to 50.4% in APAC overall, and lower figures in Australia and ASEAN—both at 40%. Similarly, concerns about AI data bias are more pronounced in India (28%) than in ASEAN (21.8%) and Australia (20%).

Beyond quality, 62% of Indian organisations identify shortcomings in data governance and privacy frameworks as another major hurdle. These issues pose strategic risks for enterprises trying to build scalable and trustworthy AI systems.

Building Trust through Better Data

To close the gap between AI potential and outcomes, Indian enterprises are investing in data integration tools, ML deployment platforms, and advanced analytics. These initiatives aim to build AI-ready data architectures that support integrity, compliance, and transparency.

According to IDC, sectors such as retail, finance, and manufacturing are already applying GenAI for compliance management, fraud detection, and predictive maintenance, respectively. However, the report emphasises that these benefits can only be scaled through consistent improvements in data infrastructure.

“GenAI is transforming industries in India,” said Deepika Giri, Associate Vice President, Big Data Analytics, Blockchain, and Web3 Research, IDC Asia/Pacific. “However, to unlock its full potential, organisations must prioritise trusted data, robust governance, and infrastructure readiness to scale AI effectively and responsibly.”

The report also highlights the role of cloud infrastructure, with 51% of Indian enterprises currently deploying AI solutions in the cloud and 80% viewing cloud migration as essential to their AI strategies. While cloud and hybrid models offer scalability, the findings suggest that without addressing data issues, India’s AI ambitions may fall short of delivering real value.