Report Overview

Growing data-based artificial intelligence (AI), rapid advancements in deep learning (DL), and growing potential R&D in AI systems are projected to propel the expansion of the India artificial intelligence (AI) market during the forecast period between 2023 and 2029.

India Artificial Intelligence (AI) Market - Industry Trends & Forecast Report, 2029

India artificial intelligence (AI) market size was estimated at USD 672.11 million in 2022. During the forecast period between 2023 and 2029, the size of India artificial intelligence (AI) market is projected to grow at a CAGR of 32.26% reaching a value of USD 3,966.51 million by 2029. Major growth drivers for the India artificial intelligence (AI) market include an increasing volume of data generated by businesses and growing need to extract insights from this data. The rise of big data analytics and the internet of things (IoT) is also contributing to the rapid growth of the AI market in India. Also, the increasing number of AI startups and high adoption of technological advancements in the country have created a favorable environment for the development of AI-based products and services. The Indian government has also recognized the potential of AI and has launched several initiatives to promote its adoption. For instance, the government has launched the National Strategy on Artificial Intelligence (NSAI), which aims to create a vibrant AI ecosystem in India and position the country as a global leader in AI. The government has also announced plans to develop AI-based applications in major areas, such as healthcare, agriculture, and education.

India Artificial Intelligence (AI) Market – Overview

India artificial intelligence (AI) market refers to the application of AI technology, such as machine learning (ML), natural language processing (NLP), and computer vision, to various industries and sectors in India. It involves the development and deployment of intelligent systems and solutions that can simulate human intelligence, perform cognitive tasks, and automate complex processes. The market includes various AI-enabled products, platforms, and services, such as chatbots, virtual assistants, image recognition tools, predictive analytics solutions, and speech recognition systems, among others. The India artificial intelligence (AI) market is expected to grow rapidly in the coming years, driven by the increasing demand for AI-based applications and services across major industries, including healthcare, finance, retail, and manufacturing.

India Artificial Intelligence (AI) Market

Growth Drivers

Growth of Data-based AI and Advancements in Deep Learning

India artificial intelligence (AI) market is experiencing rapid growth due to the increasing adoption of data-based AI and advancements in deep learning technology. Data-based AI, which involves using large volumes of data to train algorithms and models, has become a key driver of innovations in the AI market. With the continuous high growth of big data and the increasing availability of data sources, such as sensors and IoT devices, companies are leveraging data-based AI to gain insights, optimize processes, and enhance the decision-making process. In addition, advancements in deep learning technology have enabled the development of more sophisticated AI models that can learn from complex and unstructured data, such as images, speech, and text. It has led to the emergence of new AI applications and use cases, such as image recognition, NLP, and voice assistants. The healthcare, finance, and retail sectors in India are particularly driving the growth of the AI market, as they are increasingly adopting AI solutions to improve operational efficiency, enhance customer experiences, and deliver better outcomes. The growing demand for AI-based products and services is expected to continue to fuel the growth of the India AI market during the forecast period.

Restraints

Limited Number of AI Experts

The growth of AI market in India is facing a challenge in the form of a limited number of AI experts. While the demand for AI solutions and services is increasing rapidly, there is a shortage of skilled professionals who can develop, implement, and maintain these solutions. The talent gap is particularly acute in the field of DL, where specialized skills are required to build and train complex neural networks. As a result, the cost of hiring AI talent has increased, and many companies are finding it difficult to attract and retain skilled professionals. It has created a bottleneck in the development of AI solutions in India and is anticipated to remain a significant challenge for the market growth in the coming years.

Impact of COVID -19 on India Artificial Intelligence (AI) Market

COVID-19 pandemic had a positive impact on the India artificial intelligence (AI) market. The pandemic has accelerated the adoption of AI in certain industries, such as healthcare and e-commerce, where there has been an increased demand for automation and digital solutions. AI-powered tools such as chatbots and virtual assistants have also been increasingly used in customer service and support functions, as businesses looked for ways to maintain operations despite social distancing restrictions.

India Artificial Intelligence (AI) Market

Segmental Coverage

India Artificial Intelligence (AI) Market – By Solution

By solution, the India artificial intelligence (AI) market is divided into Hardware, Software, and Services segments. The software segment holds the highest share in the India artificial intelligence (AI) market. The software is an essential component for the development and deployment of AI-based solutions and applications. As AI technology continues to advance, the demand for sophisticated and high-quality software tools and platforms is increasing. The software tools are utilized in different industries such as healthcare, finance, and retail for tasks, such as fraud detection, image recognition, and chatbots. Also, the availability of open-source AI software and development frameworks has made it easier for companies and developers to create AI-based solutions at a lower cost. It has also contributed to the growth of the software segment in the India AI market.

India Artificial Intelligence (AI) Market – By Technology

Based on technology, the India artificial intelligence (AI) market is divided into Deep Learning (DL), Machine Learning (ML), Natural Language Processing (NLP), and Machine Vision segments. The deep learning (DL) technology segment holds the highest share in the India AI market for several reasons. DL is a subset of ML that uses artificial neural networks to simulate human decision-making. DL algorithms can process and analyze large datasets quickly and accurately, making it a popular choice for various applications, such as image recognition, NLP, and speech recognition. The increasing adoption of AI technology in various industries, including healthcare, automotive, and retail, has led to a rise in demand for DL. DL algorithms are capable of recognizing patterns and making predictions based on the data, which has made it a vital component in developing AI-based solutions. Additionally, the availability of advanced computing technologies such as graphics processing units (GPUs) and field-programmable gate arrays (FPGAs) has further accelerated the adoption of DL. These technologies provide the necessary processing power to train complex DL models efficiently. Also, the presence of major tech giants in India, such as Google, Microsoft, and Amazon, which are heavily investing in AI research and development, has contributed to the growth of the DL segment in the India AI market.

India Artificial Intelligence (AI) Market – By End Use

Based on end use, the India artificial intelligence (AI) market is divided into Healthcare, BFSI, Law, Retail, Advertising & Media, and other (Automotive & Transportation, Manufacturing, Agriculture) segments. The advertising & media segment held the highest share in the India artificial intelligence (AI) market due to the increasing adoption of AI-powered technologies for various applications in this sector. AI is being utilized in advertising & media for tasks, such as personalized content creation, targeted advertising, sentiment analysis, and predictive analytics. These technologies help in analyzing and understanding customer behavior, preferences, and trends, thereby enabling companies to create more effective and personalized advertising campaigns. Additionally, AI-powered chatbots and virtual assistants are being used to improve customer engagement and provide better customer service. The high level of competition in the advertising & media industry has also led to an increased focus on AI-powered solutions to gain a competitive edge. All these factors have contributed to the growth of the AI market in the advertising & media segment in India.

India Artificial Intelligence (AI) Market – By Region

Based on region, the India artificial intelligence (AI) market is divided into North India, South India, East India, and West India segments.

Competitive Landscape

Major players operating in the India artificial intelligence (AI) market include Advanced Micro Devices, AiCure, Arm Limited, Atomwise, Inc., Ayasdi AI LLC, Baidu, Inc., Clarifai, Inc, Cyrcadia Health, Enlitic, Inc., and Google LLC. To further enhance their market share, these companies employ various strategies, including mergers and acquisitions, partnerships, joint ventures, license agreements, and new product launches.

Recent Developments

• In February 2023 – Nestle SA, Swiss-based global leader in the food industry, announced that it had rolled out its Indian unit’s AI model in world markets.

• In February 2023 – The Government of India stated that with the two objectives of “making AI in India and making AI work for India” it was expanding the INDIAai initiative partnering with India-based tech companies, startups, and academic institutions. INDIAai (The National AI Portal of India) is a joint venture by MEITY, NEGD and NASSCOM. It was set up to prepare the India for an AI future.

• In December 2022 – Google held its annual ‘Google For India 2022’ event in New Delhi, India. The company stated that it was harnessing the power of AI to make India’s digital journey equitable, inclusive, and safe for all users – new and existing. In 2020, Google announced the USD 10-billion worth ‘Google for India Digitization Fund’ to accelerate India’s digital economy. Two years later, Google revealed its plans to refocus its efforts toward AI in India to make the internet inclusive.

Scope of the Report

By Solution

• Hardware

• Software

• Services

By Technology

• Deep Learning (DL)

• Machine Learning (ML)

• Natural Language Processing (NLP)

• Machine Vision

By End Use

• Healthcare

• BFSI

• Law

• Retail

• Advertising & Media

By Region

• North India

• South India

• East India

• West India