India’s business leaders are in a hurry to put artificial intelligence (AI) at the forefront of growth strategies, yet most declare policy and governance have failed to keep up — a mismatch that will determine strategy, recruitment and managing risk across sectors. A new KPMG India CEO Outlook survey discovers 65% of Indian CEOs consider AI an investment priority, while 76% caution the lagging pace of AI regulation and governance may hamper the success of their organization.
The figures reflect a dramatic duality. CEOs are upbeat on the one hand: most believe AI will yield quantifiable returns within a very shorter time frame than in the past projected, and most believe their organisations are ready to embrace AI tools. Conversely, executives are increasingly aware that weaknesses in regulation, ethics protection and cyber-security stance might convert opportunity into risk if handled loosely.
What leaders are prioritising
CEOs promise to allocate capital and time to AI for quicker decision-making, automation and new top lines. Boards will therefore be considering not only tech vendors and applications but also the organisational capabilities—data maturity, governance models and reskilling strategies—to digest AI safely. The KPMG survey indicates Indian boards are optimistic about AI uptake but cautious of real-world risks like ethical issues and data privacy.
The regulatory concern
The prevailing opinion that regulation is behind is anything but abstract: ambiguous rules create compliance uncertainty, escalate litigation risk and can delay product rollout. CEOs identified regulatory loopholes as a scaling impediment for AI in mission-critical business processes such as lending, hiring, and healthcare. To founders and growth-stage CEOs, this implies time and budget allocation towards legal review, third-party audits, and designing explainability and transparency into product development.
Risk vectors: ethics and security
In addition to regulation, there are ethical risks and cybersecurity that were prioritized by leaders as top-of-mind practical issues. The urgency to implement AI rapidly can leave internal controls behind, leading to hazards from biased models, unreported use of data, and adversarial attacks. A number of Indian CEOs informed the survey that they are speeding up employee training and revising security procedures to deal with AI-related threats — an indication that investment plans will have to include governance and defence, not merely compute and licences.
What it means for India’s CEOs and founders
Get governance underway. Hanging around for regulators is not an option. Implement ethics committees, model-risk procedures, and checks for compliance so your AI pilots can grow without incurring governance debt.
Invest in talent remarkably early. The survey determines leaders are retraining and retaining with a focus; organisations that act fast to upskill people will bring AI pilots into production sooner.
Design for explainability and auditability. Particularly in B2B products or regulated verticals (finance, health, public services), design explainability in as a feature, not an afterthought. This reduces regulatory friction and fosters trust.
Play security-first. AI increases the attack surface. Security architecture and incident response need to be AI-conscious — from model-integrity checks to data lineage and access controls.
A leadership moment
The KPMG findings suggest Indian CEOs are at an inflection point: they recognise AI’s strategic upside but also acknowledge the leadership burden that comes with it. Those who treat governance, ethics, talent and security as integral to AI strategy will likely lead the next wave of durable growth. For others, fast adoption without guardrails could mean costly setbacks.
As India emerges as a global technology leader, corporate executives have a stark choice — go after AI as a packaged product, or drive its responsible adoption across business and society. The poll makes it clear: the CEOs who master both the technology and the regulations will have the edge
