Report

The India Artificial Intelligence market is projected to reach USD 22.21 billion by FY2031 from USD 7.07 billion in FY2023 with a CAGR of 15.38% for the forecast period between FY2024 and FY2031 driven by government initiatives to promote AI development, a thriving start-up ecosystem, industry adoption across various sectors, research and education collaborations, and international partnerships. Moreover, AI solutions are being implemented in healthcare, finance, retail, and manufacturing, enhancing efficiency and customer experiences.
Collaborations have played a crucial role in fostering the growth of India artificial intelligence market. International partnerships with leading technology companies, research institutions, and governments have facilitated knowledge sharing, technology transfer, and joint projects. Moreover, these collaborations have enabled India to tap into global expertise, access cutting-edge research, and leverage advanced AI technologies. Additionally, collaborations have helped in attracting investments and promoting cross-border innovation. By working together, India has been able to accelerate its AI capabilities, enhance the quality of research and development, and create opportunities for collaboration-driven initiatives in AI across various sectors, contributing to the overall growth of the AI industry in the country. For example, the U.S.-India Artificial Intelligence (USIAI) initiative promotes cooperation in critical areas of mutual priority between the two countries. Serving as a platform, USIAI aims to facilitate discussions on opportunities, challenges, and barriers for bilateral AI research and development collaboration. It aims to foster AI innovation, encourage the exchange of ideas for building an AI workforce, and propose ways to foster partnerships.
Advent of Cybersecurity in India AI Market
The advent of cybersecurity in the Indian Artificial Intelligence market has brought significant importance to protecting AI systems from cyber threats. With the increasing adoption of AI technologies across various sectors, ensuring the security and integrity of AI systems has become crucial. India has been focusing on cybersecurity measures by establishing cybersecurity centers nationwide for its safety purposes. For example, National Cyber Coordination Centre (NCCC) is a functional agency in India responsible for cybersecurity and e-surveillance. Its primary goal is to assist the country in countering malicious cyber activities by serving as an entity that monitors internet traffic and defends against both domestic and international attacks. The NCCC collaborates with various security and surveillance agencies and with CERT-In (Computer Emergency Response Team) under the Ministry of Electronics and Information Technology. The NCCC encompasses components such as a strategy for preventing cybercrime, training for cybercrime investigation, and the review of outdated laws of cybersecurity.
Introduction of a Plethora of AI Technologies
The India Artificial Intelligence (AI) market is witnessing the introduction of a wide range of AI technologies. These advancements encompass various sectors such as healthcare, agriculture, finance, and transportation. With the integration of AI, India can achieve increased productivity, efficiency, and innovation. AI technologies enable sophisticated data analysis, automation, and predictive modeling, facilitating informed decision-making and driving digital transformation. This influx of AI technologies presents significant opportunities for economic growth, improved sector performance, and establishing India as a prominent player in the global artificial intelligence market. For example, on February 28th, 2023, the Unique Identification Authority of India (UIDAI) introduced an advanced Artificial Intelligence (AI)-based fingerprint authentication system for Aadhaar.
This new product focuses on swiftly detecting and preventing spoofing attempts. With its two-factor/layer authentication, it incorporates additional measures to verify the authenticity of fingerprints, reducing the likelihood of successful spoofing. This development significantly benefits various sectors, including banking, finance, telecommunications, and government services. Moreover, it strengthens the Aadhaar-enabled payment system, ensuring greater security and deterring fraudulent activities by unscrupulous individuals. Additionally, the system aims to empower the underprivileged population, reinforcing the overall security and reliability of Aadhaar-based transactions.
Government Regulations
Government regulations have had a significant impact on India artificial intelligence market. These regulations have also fostered the development of local AI capabilities, promoted domestic research and development, and created opportunities for homegrown AI startups to thrive in the Indian market. For example, National Strategy for Artificial Intelligence (NSAI) aims to establish India as a global leader in AI by promoting research, development, and adoption of AI technologies across various sectors. The strategy focuses on key areas such as healthcare, agriculture, education, and smart cities, aiming to leverage AI for socio-economic development. As a part of this initiative, NITI Aayog has embraced a three-fold strategy that involves conducting experimental proof-of-concept AI projects in different domains, formulating a comprehensive national strategy to foster a thriving AI ecosystem in India, and collaborating with experts and stakeholders.
Moreover, in recent times, NITI Aayog has formed partnerships with prominent AI technology companies to implement AI initiatives in crucial sectors like agriculture and healthcare. This proactive engagement reflects NITI Aayog's commitment to harnessing AI's potential for societal benefits and addressing persistent challenges in India.
Impact of COVID-19
The COVID-19 pandemic had a significant impact on the India artificial intelligence market. In the pre-COVID scenario, India was already experiencing growth and advancements in AI, with increasing adoption across industries. However, the pandemic acted as a catalyst for the accelerated adoption and utilization of AI technologies. During the crisis, AI played a crucial role in various aspects such as healthcare, contact tracing, remote work, and customer service automation. In the post-COVID scenario, the demand for AI solutions and applications intensified as businesses and organizations sought to enhance efficiency, automate processes, and address new challenges.
Moreover, the pandemic highlighted the importance of AI in enabling remote operations, predicting and managing outbreaks, analyzing data, and optimizing resources. It also emphasized the need for AI-powered solutions in healthcare diagnostics, supply chain management, and risk assessment. As a result, the India artificial intelligence market witnessed increased investments, innovation, and collaboration, thereby positioning it for further growth and development in the post-COVID era.
Key Players Landscape and Outlook
The India artificial market is witnessing remarkable expansion, as prominent Indian companies prioritize international collaborations to enhance their AI capabilities and create advanced technologies and design tools. These companies are dedicating increased resources to bolster energy resilience, investing in research and development, and expanding their distribution networks. Furthermore, they are actively engaging in substantial mergers, acquisitions, and partnerships, including joint ventures, to further strengthen their market position.
In May 2023, Wipro Limited, a prominent technology services and consulting firm, revealed an enhanced collaboration with Google Cloud to provide clients access to advanced generative AI capabilities. Wipro plans to incorporate Google Cloud's comprehensive range of generative AI products and services, which includes Vertex AI, Generative AI App Builder, and the Model Garden collection of foundation models.
In the same month, 2023, TCS announced an extended collaboration with Google Cloud and introduced their new offering, TCS Generative AI. This innovative solution utilizes Google Cloud's generative AI services to create and implement tailor-made business solutions, enabling clients to harness the potential of this exciting technology for accelerated growth and transformation. Leveraging their extensive industry expertise and investments in research and innovation, TCS has developed a diverse portfolio of AI-powered solutions and intellectual property in various domains such as AIOps, Algo Retail, smart manufacturing, digital twins, and robotics.