Benefiting from robust support systems, including an unparalleled startup ecosystem and a vast reservoir of talent, India is positioned to harness the potential of AI and ascend the AI maturity ladder. Currently, India stands as an AI Practitioner (stage 2), according to the IDC study.
As Indian businesses increasingly recognize the advantages of AI adoption, enterprise spending on AI is anticipated to exhibit the highest growth rate amongst the surveyed markets. AI software sector will be the primary driver of overall market growth, reaching $2.6 billion by 2027, with AI infrastructure spending projected to hit $733 million by the same year.
India’s focus remains on enhancing employee productivity and elevating customer experiences through AI-driven applications. However, while 80% of surveyed large organizations utilize AI/ML to enhance business outcomes, merely 6% view their AI adoptions as central to their competitiveness. This substantial gap underscores the challenges in AI deployment and underscores the critical role of change management.
India – Positioned to Emerge as the Next AI Powerhouse
AI spending in India is set to undergo the swiftest expansion among the eight examined markets – Australia, India, Indonesia, Japan, Korea, Malaysia, Singapore, and Taiwan, with an estimated Compound Annual Growth Rate (CAGR) of 31.5% from 2023, forecasted to reach a significant $5.1 billion by 2027. Boasting 20% of the world’s data and AI talent, India’s strategic position as a global AI leader is reinforced by its robust developer community and skill penetration, poised to surpass even the US.
AI spending in India is set to undergo the swiftest expansion among the eight examined markets – Australia, India, Indonesia, Japan, Korea, Malaysia, Singapore, and Taiwan, with an estimated Compound Annual Growth Rate (CAGR) of 31.5% from 2023, forecasted to reach a significant $5.1 billion by 2027.
Investments in AI for the years 2024 and 2025 will prioritize the development of AI infrastructure, laying the foundation for high-value use cases that promise transformative impacts in the future. Notably, the BFSI (Banking, Financial Services, and Insurance) and manufacturing sectors are emerging as the top spenders in India. The manufacturing industry, in particular, is anticipated to play a pivotal role in driving the country’s economic expansion, particularly within sectors such as electronics and consumer goods.
India strongly outperforms the Asia/ Pacific average in the government dimension because of the current government’s pro-AI stance. $30.7 million is earmarked in FY 2024-25 to establish three centers of excellence in AI in India focusing on agriculture, health, and sustainable cities.
The findings were unveiled at the AI for India Conference held May 14, 2024, which featured – Mr. Santhosh Viswanathan, Vice President and Managing Director, India Region and Sharath Srinivasamurthy, Associate Vice President, IDC discussing the findings of the study.
“Amazing India reflects the massive opportunity AI unlocks for our country. With an unmatched talent pool, frugal innovation and data at scale, India stands poised to lead the global AI revolution. India’s commitment to AI, underscored by its proactive approach, is driving transformative growth. This positions India it as a frontrunner in shaping the future of this technology. Intel recognizes this extraordinary opportunity, elevating India as a distinct geography for our business operations. We’re proud to be part of India’s journey towards AI excellence and building an Amazing India”, said Santhosh Viswanathan, Vice President and Managing Director, India Region.
As AI continues to weave itself into the fabric of various industries, the AI For India Conference underscored the importance of embracing this technology to stay competitive and thrive in an ever-evolving digital landscape, with a program built around the theme of “Bringing AI Everywhere”.
