India's artificial intelligence (AI) industry is set to cross USD 17 billion in market value by 2027—over three times the size it is now—based on a new report by the Boston Consulting Group (BCG).
Strong enterprise technology spending, a thriving digital ecosystem, and a large pool of skilled talent are the reasons behind such quick growth.
The report, "India's AI Leap: BCG Perspective on Emerging Challengers," points out that India boasts 16% of the world's AI talent, falling only behind the United States. This is a testament not just to the size of the country's workforce but also to the robust STEM education system.
BCG observes that the AI ecosystem of India is witnessing record growth, with over 600,000 professionals already employed in AI, over 700 million online users, and over 2,000 AI startups established in the last three years alone.
"India's home market for AI is expected to grow over three-fold to USD 17 billion by 2027, ranking among the world's fastest-growing AI economies. This is driven by increasing investments in enterprise technology, a vibrant digital ecosystem, and a solid talent base," the report added.
Most importantly, India's digital public infrastructure—such as platforms like Aadhaar, UPI, DigiLocker, and the Open Network for Digital Commerce (ONDC)—is laying the scalable foundation for the adoption of AI across sectors. When coupled with ubiquitous smartphone penetration and one of the largest internet-using populations in the world, this digital footprint generates enormous amounts of data—required for building and training AI models.
According to BCG, this massive scale, alongside India's open digital architecture, enables the creation of population-level AI solutions across healthcare, education, finance, and other critical sectors.
In anticipation of growing data demands, India is preparing to add 45 new data centres in 2025, expanding its capacity by an additional 1,015 megawatts, supplementing its current network of 152 facilities.
Further propelling AI growth, the Indian government's flagship scheme IndiaAI is allocating more than ₹10,000 crore towards creating a national AI computational infrastructure. This will provide access to over 10,000 GPUs, aiming at enabling large-scale AI model training and research.
AI is not an option anymore, it's a business imperative. Indian businesses are employing it to bypass conventional growth curves and compete with confidence globally," said Mandeep Kohli, Managing Director and Partner at BCG India.
"Although the hurdle rate for deploying successfully is high, the reward is even greater, and the outcome is the best advertisement. What differentiates the leaders is not so much the tech, but the management of change, the development of talent, and the infusion of AI as part of the DNA of their organisation," Kohli added.
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