India’s data breach costs hit record ₹220 million amid rising AI security gaps: IBM report

The report spotlights a critical oversight in AI security, showing that while Indian enterprises embrace AI rapidly, less than 40% have proper access controls and most have yet to implement robust governance policies

IBM’s latest Cost of a Data Breach Report reveals that the average cost of a data breach in India reached an unprecedented INR 220 million in 2025, reflecting a 13% rise from the previous year. The report also draws attention to the widening gap between the rapid adoption of artificial intelligence (AI) and the lag in implementing robust AI security and governance measures, leaving Indian organizations increasingly vulnerable to cyber threats.

For the first time, the report examines AI-related breaches and highlights a concerning trend: while many Indian enterprises are quickly integrating AI technologies into their operations, fewer than four in ten have established AI access controls. Nearly 60% of organizations either lack formal AI governance policies or are in the process of developing them, signalling a widespread security oversight.

Viswanath Ramaswamy, Vice President of Technology at IBM India & South Asia, emphasized the strategic risks involved, stating, “India’s accelerating AI adoption brings immense opportunity, but it’s also exposing enterprises to new and complex cyber threats. The absence of access controls and AI governance tools is not merely a technical issue but a critical vulnerability. It is essential for organizations to embed trust, transparency, and governance into AI systems by design.”

AI gaps driving breach costs

The report also underscores the financial consequences of these security gaps. Phishing remains the leading cause of breaches, closely followed by attacks targeting third-party vendors and supply chains. Encouragingly, Indian organizations have improved breach detection times, with the average lifecycle to identify and contain breaches decreasing by 15 days compared to last year.

Sectors such as research, transportation, and industry continue to bear the highest costs from breaches, reflecting their data-intensive operations. Despite evidence that AI and security automation can significantly reduce breach expenses, nearly three-quarters of surveyed Indian organizations have yet to adopt these technologies extensively.