India’s artificial intelligence (AI) market is projected to experience significant growth in the coming years, with a compound annual growth rate (CAGR) of 25 percent, according to a report by Nasscom. The report states that by 2027, the AI market in India is expected to reach $17 billion, alongside a similar increase in AI investments. The growth of the AI market in India is attributed to various factors, including increased enterprise tech spending, a growing AI talent base in the country, and a significant rise in AI investments.
Debjani Ghosh, President of Nasscom, highlights the expansion of Indian tech companies into AI-driven analytics, intelligent automation, and personalized customer interactions. This evolution is thanks to the advent of generative AI, as companies move beyond traditional IT and business process management. However, achieving this transformation requires substantial investment in AI skilling, ethical AI development practices, and governance frameworks.
India is currently home to the second-highest number of employees working in AI job functions, with 420,000 individuals. The country also boasts a higher skills penetration, with three times more AI-skilled talent than other nations. Over the last seven years, India has experienced a 14 times growth in AI-skilled individuals, positioning it among the top five nations in this regard. As AI investments continue to increase, the demand for AI talent in India is expected to grow at a CAGR of 15 percent until 2027.
Recognizing the importance of human capital in the AI journey, leading firms in India have made significant investments in upskilling and reskilling their workforce in AI and related technologies. Some organizations have allocated $1 billion over the next three years for this purpose, with the aim of creating future-ready organizations with dynamic and evolving Centers of Excellence driving the AI agenda.
Rajiv Gupta, MD and Senior Partner at BCG, emphasizes that Indian companies are starting to keep pace with the growth of AI. The tech sector in India is actively working towards creating organizations that are prepared for the future, with dynamic Centers of Excellence leading the way in shaping the AI agenda.
As India’s AI market continues to grow, the country is well-positioned to leverage the power of AI and emerge as a global leader in this field. With investments in AI skilling, a robust talent base, and a supportive ecosystem, India is primed to unlock its AI potential and reap the benefits of this transformative technology.
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