Indian tech firms must ensure compliance while building trust to unlock AI’s full potential: Forrester

With half of G20 nations mandating domestically tuned AI (artificial intelligence) models for public services, Indian firms must ensure compliance while building trust to unlock AI’s full potential, cautioned Forrester, Massachusetts-based tech research firm.

A team of Forrester analysts which was here on Wednesday (December 3, 2025) to sharetechnology predictions for 2026 with the media and industry experts said, in 2026, organisations in India would face a reckoning. As AI hype deflates, leaders would abandon performative gestures and premature calls in favour of evidence-based decision-making and operational rigor, they predicted.

According to Forrester, a quarter of India CIOs will be asked to bail out business-led AI failures. Rapid deployment of generative AI without governance will lead to system errors and reputational risks. In India, where AI adoption is accelerating in banking and insurance, CIOs will become the custodians of responsible AI, tasked with implementing governance frameworks before high-profile failures hit headlines.

As a precaution, they said, success, however, would depend on prioritising long-term value over short-term gains — with trust, transparency, and measurable impact as non-negotiables.

Forrester analysts also forecast that domestic firms would move from experimentation to accountability as regulators and consumers demand transparency in AI outcomes.

Forrester analysts also predicted that a Global 1000 CIO would declare technical debt bankruptcy in 2016, noting that technical debt was strangling innovation, consuming up to 60–80% of IT budgets. However, for Indian conglomerates with decades-old ERP systems, outsourcing legacy operations wouldbecome a survival strategy, freeing resources for cloud-native platforms and AI-driven transformation, they opined.

Digital and AI sovereignty driveprivate cloud renaissance with double digit year-over-year growth. India’s data localisation laws and the National Quantum Mission would amplify demand for sovereign hybrid cloud architectures. Enterprises wouldprioritise private cloud for sensitive workloads and AI model training to mitigate geopolitical risks and ensure compliance with emerging sovereignty mandates, domain experts at Forrester predicted.