A large proportion of Indian small and medium enterprises (SMEs) plan to boost cybersecurity spending in the next 12-24 months yet experience gaps in terms of preparedness, monitoring and expertise, according to a TTBS and CMR study.
The SME Digital Insights 2026 Cybersecurity study found that 84% of Indian SMEs plan to increase cybersecurity spend, highlighting that businesses are taking security seriously as they continue to embrace the digital transformation journey.
However, the study identified a gap between expenditure planning and actual cybersecurity maturity. Around 40% of SMEs experienced a cyber incident in the last two years yet only 28% took structural actions to improve their cybersecurity capabilities after an incident.
Continuous monitoring remains a major challenge, as only 12% of SMEs continuously monitored their cybersecurity environments, suggesting that businesses may continue to be reactive rather than proactively detecting and responding to threats.
The study found that 35% of SMEs operate multiple cybersecurity tools in a fragmented manner, with limited visibility over the overall risk, creating difficulty for businesses in gaining a holistic understanding of their cybersecurity landscape.
Cybersecurity spending continues to remain low for many businesses, with 46% allocating less than 5% of their overall IT budget to cybersecurity, leaving ample room for increased budget allocation as businesses continue to digitalize operations.
Artificial intelligence (AI) is another emerging influence on SMEs’ cybersecurity strategies, as 35% of the businesses identified it as a key enabler to enhance detection, monitoring as well as incident response capabilities.
Concurrently, 34% of SMEs foresee AI-enabled cyber threats to have a significant impact on their businesses in the next 12-24 months, pointing to the dual impact of AI technologies – as both a tool to secure and a threat enabler.
Vishal Rally, Chief Revenue Officer at Tata Teleservices, said the planned increase in cybersecurity investment reflects that SMEs acknowledge the need to integrate security within the overall digital transformation strategy.
Prabhu Ram, Vice President of the Industry Research Group at CMR, said that the findings reflect the uneven maturity in cybersecurity among Indian SMEs despite the anticipated rise in investment intent.
For SMEs, the findings highlight that simply increasing cybersecurity budgets may not be enough to address the existing gaps in security. As businesses expand and become more digitalized, enhanced monitoring, visibility, expertise and integrated practices will also be required to mitigate the rising threats.
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