A large majority of Indian small and medium enterprises (SMEs) are planning to increase their cybersecurity investments over the next 12-24 months, but gaps in preparedness, monitoring and skilled expertise continue to remain a challenge, according to a study by Tata Tele Business Services (TTBS) and CyberMedia Research (CMR).

The SME Digital Insights 2026 Cybersecurity study found that 84 per cent of Indian SMEs plan to increase their cybersecurity investments over the next 12-24 months, indicating that businesses are increasingly recognising cybersecurity as a strategic business priority.

However, the study also highlighted a significant gap between investment plans and cybersecurity readiness.

It said, “While investment intent is strong, many SMEs continue to rely on reactive security practices. 40 per cent of SMEs have experienced a cyber-incident over the last two years, yet only 28 per cent implemented structural cybersecurity improvements after the incident. Similarly, only 12 per cent continuously monitor their cybersecurity environments, highlighting the need for proactive, continuously managed cybersecurity capabilities”.

The study further found that around 35 per cent of SMEs operate multiple cybersecurity tools but have limited visibility into risks.

This indicates that while businesses are adopting different security solutions, fragmented tools and limited monitoring capabilities can make it difficult for organisations to get a clear view of their overall cybersecurity environment.

Spending on cybersecurity also remains limited for a significant number of SMEs. About 46 per cent of SMEs allocate less than 5 per cent of their IT budgets to cybersecurity, suggesting considerable scope for increased investment as businesses strengthen their digital infrastructure.

Vishal Rally, Chief Revenue Officer, Tata Teleservices, said “It is encouraging to see that 84 per cent of SMEs plan to increase their cybersecurity investments over the next two years. As cyber threats continue to evolve, businesses need to make cybersecurity an integral part of their broader digital transformation journey”.

The findings also point to a growing role for artificial intelligence (AI) in cybersecurity. Around 35 per cent of SMEs recognise AI as a cybersecurity enabler, particularly for faster threat detection, automated monitoring and improved incident response.

At the same time, 34 per cent expect AI-powered cyber threats to materially impact their businesses over the next 12-24 months, highlighting the dual impact of AI on the cybersecurity landscape.

Prabhu Ram, Vice President – Industry Research Group (IRG), CyberMedia Research (CMR), “Our study findings highlight a clear inflection point in the cybersecurity journey of Indian SMEs. While investment intent is rising sharply, cyber maturity remains uneven, with just 12 per cent of SMEs continuously monitoring their cybersecurity environments. At CyberMedia Research (CMR), our analysis suggests that SME cyber resilience will increasingly depend on integrated, continuously managed approaches – a shift already visible among the more mature enterprises in our sample.”

The findings suggest that as Indian SMEs increase cybersecurity spending, businesses may need to focus not only on adding security tools but also on improving monitoring, visibility, expertise and the overall strength of their cybersecurity systems.

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