India's data breach cost reaches record Rs 25.5 crore in 2026: IBM report
The average cost of a data breach in India has surged to an all-time high of Rs 25.5 crore in 2026, marking a 15.9 per cent increase from Rs 22 crore recorded last year, according to IBM's latest Cost of a Data Breach Report 2026.
The report highlights the growing sophistication of cyberattacks, largely driven by the increasing use of artificial intelligence (AI) by cybercriminals.
IBM found that the average number of records compromised during a cyberattack increased to 39,500 in 2026, compared with 38,200 in 2025, indicating the expanding scale of data breaches across organisations.
According to the report, 26 per cent of malicious cyberattacks in India involved AI-generated techniques, enabling hackers to launch more advanced and large-scale attacks.
Despite the rise in AI-powered threats, the adoption of AI-based security solutions remains relatively low among Indian organisations. Only 32 per cent of businesses reported extensive use of AI and security automation tools, while 36 per cent said their implementation remained limited. Another 32 per cent stated that they had not adopted such technologies at all.
The study revealed a significant difference in financial losses between companies that embraced AI-driven security measures and those that did not. Organisations without AI-powered security systems faced average losses of Rs 31.6 crore, compared with Rs 21.3 crore among organisations that extensively used automation technologies. ALSO READ: Retired Woman Doctor Loses Rs. 1.55 Crore in 'Digital Arrest' Cyber Fraud in Lucknow
The time taken to identify security breaches was also considerably higher for businesses without AI-enabled systems. On average, it took 236 days to detect breaches in such organisations, while companies using advanced security automation identified incidents within 175 days.
The report also highlighted the growing threat posed by "shadow AI," a term used to describe the unauthorised use of artificial intelligence tools within organisations. According to IBM, shadow AI increased the average cost of a breach by Rs 1.79 crore, making it one of the biggest contributors to rising cybersecurity expenses.
Among industries, the financial services sector reported the highest average losses, with breach costs reaching Rs 40.9 crore. The technology sector followed at Rs 35.7 crore, while the communications industry recorded average losses of Rs 34.5 crore.
Phishing attacks, including voice phishing and SMS-based scams, remained the most common attack method, accounting for 19 per cent of all incidents. Drive-by compromises and supply chain attacks accounted for 16 per cent and 15 per cent of breaches respectively.
IBM also noted that proactive security strategies, including penetration testing, red teaming, threat hunting and AI governance frameworks, significantly reduced the financial impact of cyberattacks.
Nearly 73 per cent of organisations surveyed said they planned to increase cybersecurity spending after experiencing a data breach. Their key focus areas include incident response systems, identity and access management, threat detection technologies, AI security tools and employee awareness programmes.
Commenting on the findings, Gaurav Agarwal, Vice-President of Technology at IBM India and South Asia, said organisations that combined artificial intelligence with robust security frameworks were better prepared to tackle increasingly sophisticated cyber threats.
The report, prepared by the Ponemon Institute and sponsored by IBM, examined cyber incidents affecting 602 organisations worldwide between March 2025 and February 2026. ALSO READ: “Was Asked For Nudes During Online Game”: Akshay Kumar Recounts Cybercrime Incident Involving His Daughter Nitara (VIDEO)
