New Relic has released its 2026 Observability Forecast: India Edition, highlighting the operational and financial challenges faced by Indian enterprises as they scale AI adoption and digital infrastructure. Based on a global survey of 2,575 engineering and IT leaders, including 500 respondents from India, the report finds that organisations in the country incur an average cost of US$3 million for each high-impact outage.
The findings point to a gap between advanced technology adoption and operational readiness. While Indian enterprises are increasingly deploying observability tools, frequent disruptions and reactive troubleshooting continue to affect engineering productivity.
Indian organisations are ahead of global averages in monitoring AI agents and adopting AI-driven operational tools. According to the report, 56 per cent of Indian respondents actively monitor AI agents in production, compared with the global average of 35 per cent. Adoption of AIOps stands at 54 per cent in India against 36 per cent globally, while machine learning model monitoring has reached 57 per cent compared with 38 per cent worldwide.
However, the report finds that developers in India spend half their time addressing system disruptions, up from 35 per cent last year and higher than the global median of 30 per cent. This highlights the operational pressure created by software and systems deployed without sufficient operational discipline.
Indian enterprises face an average cost of US$3 million for a single high-business-impact outage. The hourly cost of downtime is estimated at US$2.43 million, equivalent to US$40,500 per minute. The frequency of such disruptions is also increasing. Around 61 per cent of Indian organisations experience high-impact outages weekly or more frequently, while 31 per cent report experiencing them multiple times a day. The latter figure represents a tenfold increase from 2025, according to the report.
The report also highlights longer outage detection and resolution times as enterprises manage increasingly complex technology environments. The average time taken to detect a high-impact outage in India has increased to 55 minutes from 41 minutes last year, while the average time to resolve such incidents has risen to more than an hour.
Third-party cloud failures, software updates and network disruptions are identified as the primary triggers of outages. Security failures are also a concern, with 32 per cent of Indian organisations identifying them as a frequent cause of downtime. This is nine percentage points higher than the global average.
India leads the surveyed markets in OpenTelemetry standardisation, with 42 per cent of respondents reporting full standardisation, nearly twice the global average of 22 per cent. However, the benefits are constrained by fragmented technology environments, with organisations using an average of six monitoring tools. As a result, only 20 per cent of Indian leaders said AI-assisted observability had significantly improved event correlation, compared with 27 per cent globally. The report points to tool fragmentation as a barrier to analysing telemetry across technology stacks.
Indian enterprises are also reporting stronger returns on observability investments. The share of organisations achieving three-to-five times return on investment (ROI) has increased from 19 per cent to 35 per cent year on year. The proportion of enterprises that have not realised a financial return or are not tracking ROI has declined from 12 per cent to 6 per cent.
The report further finds that organisations monitoring AI agents in production globally are more than twice as likely to achieve at least three times ROI compared with those that do not monitor them. Among Indian CIOs, 39 per cent prioritise AI and machine learning-powered vendor features, while 25 per cent prioritise cost.
Rob Newell, Senior Vice President and General Manager for APJ at New Relic, said, “India’s digital economy is scaling at an extraordinary pace, but this high growth has outpaced operational discipline, leaving engineering teams to pay a heavy reactive troubleshooting tax,” said New Relic Senior Vice President and General Manager for APJ Rob Newell. “While India’s proactive stance on monitoring AI agents has positioned it to lead the world in financial returns, tool sprawl is still capping the upside. To expand on the 35% of Indian respondents already capturing a 3 to 5x return on their observability investments, businesses must transition from disconnected point tools to a unified platform. Consolidation is improving developer productivity and unlocking greater agility.”
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