IBM Report: India’s Average Data Breach Cost Hits Record INR 25.5 Cr 

Average cost of a data breach in India reached a record INR 25.5 crore this year,  according to IBM’s 2026 Cost of a Data Breach Report. The figure represents a 15.9% increase from INR 22 crore recorded last year. The report also found that the average scale of data breaches increased, with 39,500 records compromised per incident compared to 38,200 records last year. 

According to the report, 26% of malicious breaches in India were AI-generated, indicating that artificial intelligence is increasingly being used to launch faster and more sophisticated cyberattacks. At the same time, organizations that extensively adopted AI and security automation recorded lower breach costs and faster response times. Around 73% of organizations said they plan to increase investments in security tools and governance after experiencing a breach.

“India’s accelerating AI adoption is creating immense opportunities for innovation, but it is also enabling cyber threats to evolve rapidly. The findings underscore that organizations using AI and strong governance, were significantly better positioned to fend off cyberattacks,” said Gaurav Agarwal, Vice President, Technology, IBM India & South Asia. “Today, most organizations apply AI in limited ways, often focused on detection. To keep pace, AI with agentic capabilities must be embedded across the full security lifecycle from detection and analysis to prioritization and remediation. That should be the strategic imperative for businesses to build resilience and a competitive advantage,” he added.  

key findings from the report: 

The AI Gap:

• Automation Adoption Stalls: 32% of firms use AI and security automation extensively, 36% use limitedly, and 32% never use it.
  
• The Cost of Standing Still: Organizations without AI and automation in security operations paid INR 316 million (INR 31.6 crore) per breach, compared to INR 213 million (INR 21.3 crore) for extensive use and INR 231 million (INR 23.1 crore) for limited deployment.
  
• Slower Response: Firms without AI and security automation took 236 days to identify and 75 days to contain breaches, compared to 175 and 81 days for companies with considerable automation. 

• Shadow AI, non-compliance with regulations, and cloud migration were the top three cost-increasing drivers in India, adding an average of INR 17.9 million (INR 1.79 crore) to breach costs.

Financial Cost of a Breach

• Financial Services Face the Highest Costs: The financial services sector recorded the highest average breach cost in India at INR 409 million (INR 40.9 crore), followed by technology at INR 357 million (INR 35.7 crore) and communications at INR 345 million (INR 34.5 crore). 

• Phishing Remains the Top Attack Vector: Phishing, including voice and SMS phishing, was the most common initial attack vector in India (19%), followed by drive-by compromise (16%) and supply chain compromise (15%). 

• Offensive Security Pays Off: Offensive security testing, such as red teaming and penetration testing, was the largest cost-reducing factor in India, saving organizations an average of INR 24.7 million (INR 2.47 crore), followed by proactive threat hunting and AI governance technology.

Organizations Strengthen Cyber Resilience

• Investment Priorities: The top five areas where organizations are planning additional security investments are incident response plans and testing (67%), threat detection and response technologies such as SIEM, SOAR and EDR (51%), identity and access management (49%), AI security and governance tools (39%), and employee awareness and training (36%).