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India Artificial Intelligence

India is one of the fastest-growing Artificial Intelligence (AI) markets worldwide, projected to exceed $17 billion by 2027 according to a Boston Consulting Group report. Backed by strong government support, 700-800 million internet users, a strong STEM education system, and a scalable public digital infrastructure, India’s AI sector offers significant entry points and opportunities for U.S. technology companies to export their AI tools and solutions across a broad range of industry sectors.

The Government of India (GOI) considers AI as a strategic tool for its socio-economic progress and aims to harness AI to make India a global leader. In March 2024, the GOI launched the IndiaAI Mission, to develop a robust AI ecosystem in the country. Towards achieving this goal, the government earmarked ₹10,300 crore (approx. $1.25 billion) to invest over a five-year period in projects accelerating various components of the IndiaAI Mission, including the following programs:

  • IndiaAI Compute Capacity;
  • IndiaAI Innovation Center (IAIC);
  • IndiaAI Datasets Platform;
  • IndiaAI Application Development Initiative;
  • IndiaAI FutureSkills;
  • IndiaAI Startup Financing; and
  • Safe and Trusted AI.

Key Sector-Specific Opportunities

  • Agriculture: The agriculture sector contributes almost 20% of India’s GDP and absorbs approximately 50% of its labor force. Deployment of AI in precision farming, weather prediction, crop management and yield, and supply chain optimization offer significant potential, particularly for drone technology and data analytics.
  • Cybersecurity: U.S. tech companies providing advanced AI-powered real-time threat detection, and automated incident mitigation solutions that ensure robust cyber defenses for enterprises, could expect to see greater demand in India.
  • Education and Skilling: The government’s focus on modernizing education and addressing education and skill gaps offers huge opportunities for AI-based personalized learning platforms, edtech, and workforce training and upskilling solutions.
  • FinTech: The value of the fintech market is projected to reach $2.1 trillion by 2030 according to a PwC – Assocham report, and with high adoption rates of digital banking, the sector provides great opportunities for AI-based solutions for fraud detection, credit risk assessment, personalized financial advice, and improving customer experience.
  • Healthcare Industries: India’s rapidly expanding healthcare market is expected to reach $610 billion by 2026. A booming Indian healthcare market presents huge AI-solution opportunities in medical diagnostics, early disease detection, patient outcome predictions, personalized care, and accelerated drug discovery processes.
  • Manufacturing: Increasing numbers of Indian manufacturers are looking to adopt AI-based automation, predictive maintenance, and supply chain optimizations for operational efficiency and precision, improved productivity and revenue, and sustainable growth.
  • Retail and Consumer: The retail and consumer market has strong demand for advanced AI solutions in areas such as customer analytics, personalized recommendations, and customer relationship management.
  • Telecom, Media and Technology (TMT): With approximately 10% of TMT organizations already implementing AI solutions at scale across their enterprises, a significant portion of the TMT industry is expected to continue to invest in sophisticated AI-driven solutions to enhance learning and development capabilities. This offers U.S. tech companies specializing in AI-powered HR technology, recruitment platforms, and virtual learning assistants, a substantial opportunity to cater to this growing market in India.
  • Travel and Hospitality: Much of the travel and hospitality sector is looking at AI-powered digital solutions to reconfigure and streamline business processes and promote seamless and contactless experiences, safety, and long-term operational improvements. Demand will grow for innovative AI applications facilitating digital transformation, improved customer experience and safety, and operational efficiencies.

Local Special Circumstances

India’s vast pool of 600,000 AI professionals, the GOI’s continued push for enhancing digital infrastructure, demand for automation and efficiency in manufacturing industries, and a flourishing ecosystem of AI startups are all significantly driving AI growth in India. Additionally, India’s diverse population and unique cultural and linguistic landscape provide a rich source of data for AI training and development. However, regulatory challenges, like data localization and privacy laws, and concerns over displacement of jobs may continue to affect India’s AI market growth.

Assistance from the U.S. Commercial Service

The U.S. Commercial Service in India offers standard as well as customized services and programs to help U.S. businesses succeed in the Indian market. For more information regarding programs, services, local trade events, and opportunities, U.S. firms may contact the U.S. Commercial Service India team for information and communications technologies (ICT) or reach out to your nearest local U.S. Commercial Service office in the United States