Majority of Indian Companies Show Confidence in Responsible AI Scaling, According to Nasscom Report

Responsible Artificial Intelligence (AI) is becoming a crucial focus for Indian businesses, evolving from a mere ethical consideration to a strategic necessity tied to trust, governance, and long-term value creation. According to Nasscom’s “State of Responsible AI in India 2025” report, nearly 60% of organizations confident in scaling AI responsibly have established mature Responsible AI (RAI) frameworks. This shift reflects a growing recognition of the importance of responsible governance in AI practices across various sectors.

Survey Insights and Progress in Responsible AI

The findings of the report are based on a survey conducted with 574 senior executives from large enterprises, startups, and small and medium enterprises (SMEs) between October and November 2025. The results indicate a significant year-on-year improvement in the adoption of responsible AI practices since 2023. Approximately 30% of Indian businesses now report having mature RAI practices, while 45% are in the process of implementing formal frameworks. This steady progress across the ecosystem highlights the increasing maturity of AI governance in the country.

Large enterprises are leading the way, with 46% reporting advanced RAI frameworks, compared to only 20% among SMEs and 16% among startups. Despite this disparity, there is a notable willingness among smaller firms to adopt responsible AI norms, demonstrating a growing awareness of the importance of compliance and governance in AI technologies.

Industry-Specific Trends and Maturity Levels

From an industry perspective, the Banking, Financial Services, and Insurance (BFSI) sector stands out with a maturity level of 35%, followed closely by Technology, Media, and Telecommunications (TMT) at 31%, and healthcare at 18%. Nearly half of the businesses in these sectors are actively enhancing their RAI frameworks, indicating a robust commitment to responsible AI practices.

Sangeeta Gupta, Senior Vice President and Chief Strategy Officer at Nasscom, emphasized that responsible AI is essential for fostering trust and accountability, especially as AI systems become integral to critical sectors like finance, healthcare, and public services. She urged businesses to move beyond compliance-driven approaches and to embed responsibility throughout the AI lifecycle to promote sustainable and inclusive innovation.

Workforce Enablement and Governance Structures

The report also highlights workforce enablement as a key area of focus, with nearly 90% of organizations investing in AI sensitization and training for their employees. Companies expressed strong confidence in their ability to meet data protection obligations, which is crucial for maintaining trust in AI systems.

Governance structures are evolving as well. While 48% of organizations assign responsibility for AI governance to the C-suite or board, 26% delegate this task to departmental heads. Additionally, AI ethics boards and committees are becoming more common, particularly among mature organizations, where 65% have established such bodies to oversee responsible AI practices.

Challenges and Future Outlook

Despite the progress made, significant challenges remain in the realm of responsible AI. The most commonly reported risks include AI hallucinations (56%), privacy violations (36%), lack of explainability (35%), and unintended bias or discrimination (29%). Key barriers to effective RAI implementation include a lack of high-quality data (43%), regulatory uncertainty (20%), and a shortage of skilled personnel (15%).

While regulatory uncertainty poses a major concern for large enterprises and startups, SMEs often cite high implementation costs as a critical constraint. As AI systems become increasingly autonomous, the report notes that businesses with higher RAI maturity feel more prepared to tackle emerging technologies like Agentic AI. Nearly half of these mature organizations believe their existing frameworks can adequately address the associated risks, although industry leaders caution that significant updates will be necessary to manage the new challenges posed by autonomous systems.

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