The server failure took place at its data center in Atlanta, United States.
"Due to unexpected network connectivity issues at SITA Atlanta Data centre, which had a worldwide impact, 25 flights were delayed from 1210 hrs to 1510 hrs (local time) on Air India network," a statement issued by Air India said.
The delay in flights left hundreds of passengers stranded.
The operation resumed after three hours.
India's junior minister for civil aviation Jayant Sinha said they had been following up on the matter and the systems have now been restored.
"Apologies for the inconvenience suffered. Air India has been asked to ensure that our valued passengers are kept fully informed at all times," Sinha wrote on twitter.
The debt-ridden airliner earlier this month invited bids from financial institutions and banks for a loan to revive its operations.
Last month the government attempted to sell 76 percent stake in the national carrier but failed to attract any buyer.