India's CEOs bet big on AI, but workforce readiness emerges as the defining challenge: KPMG Report

The KPMG 2025 India CEO Outlook reveals that while India’s business leaders maintain a robust sense of optimism regarding their organisations' growth prospects, the path forward is inextricably linked to two critical pillars: strategic investment in Artificial Intelligence (AI) and the radical transformation of the national workforce.

Facing a dynamic global environment characterised by escalating cyber threats, economic uncertainty, and the rapid integration of AI, 83 percent of CEOs in India express confidence in their organisation’s growth trajectory over the next three years, outpacing the 79 percent recorded globally.

However, this renewed confidence comes with the acknowledgment that AI adoption is simultaneously the greatest opportunity and the most formidable talent challenge.

AI has solidified its position at the zenith of CEO priorities. According to the KPMG report, 65 percent of CEOs in India consider AI their topmost investment priority, a strategic intent echoed globally by 71 percent of leaders. This focus signals a shift from tentative exploration to core business strategy, as leaders aim to build “future-ready capabilities”.

The financial commitment is substantial: approximately 57 percent of Indian CEOs plan to allocate 10–20 percent of their budgets to AI over the next 12 months. This aggressive investment strategy is underpinned by a belief in quick returns; a significant majority (73 percent) of Indian CEOs anticipate that AI will deliver a Return on Investment (ROI) within 1 to 3 years.

CEOs are primarily motivated by the promise of tangible operational improvements. Enhanced decision-making and data analysis capabilities are viewed as the most valuable advantages of AI adoption, with 23 per cent of Indian CEOs identifying them as the top benefit.

Furthermore, the report discovers that 86 percent of Indian CEOs feel their organisations are already equipped to successfully navigate AI adoption. The operational priorities reflect this optimism, with the implementation of generative/agentic AI across the business remaining a prominent focus.

Despite high confidence in AI's potential, the workforce's readiness to embrace this transformation is the most significant looming threat to organisational prosperity, the report suggests. A striking 74 percent of CEOs in India highlight that AI workforce readiness could substantially impact their organisation’s success over the next three years. This concern is marginally lower than the 77 percent reported by global CEOs, but it nonetheless underscores a severe domestic challenge.

The rapid advancement and deployment of AI have exposed acute vulnerabilities in the existing talent pool. The competition for specialised AI talent is intense, with 68 percent of Indian CEOs agreeing that the competition for AI talent could constrain their company’s future prosperity.

Business leaders are struggling to acquire and retain the digital expertise they need. Specifically, 34 percent of Indian CEOs identify bridging the gap between existing workforce skills and the capabilities required for AI adoption as a major hurdle in attracting and retaining digital talent.

Moreover, 26 percent of CEOs in India cite difficulty in finding candidates possessing the essential blend of technical proficiency and collaborative skills needed for successful AI implementation.

The integration of AI is not just affecting specialist roles; it is prompting a fundamental re-evaluation of entry-level requirements. A significant 81 percent of Indian CEOs say the integration of AI has made them rethink the skills required for entry-level roles—a substantial surge from 66 percent in 2024.

In response to this disruption, CEOs are adopting diverse and comprehensive long-term workforce strategies. The focus is decidedly on internal capability building and transformation, rather than relying solely on external hiring. Top strategic priorities include retaining and re-training high-potential talent, a focus area for 70 per cent of Indian CEOs.

Concurrently, leaders are redesigning roles and career paths to reflect effective human-AI collaboration. These strategies also involve investing in reskilling and upskilling programmes for affected roles and redeploying employees into new AI-supported positions.

Overall, 73 per cent of Indian CEOs acknowledge that integrating AI requires a reassessment of how they train their employees. The commitment to continuous learning is particularly pronounced in India, where 91 percent of CEOs believe that organisations should invest in skill development and lifelong learning to safeguard access to future talent.