India’s AI Market Set to Triple by 2027

India’s artificial intelligence (AI) market is projected to triple to $17 billion by 2027, driven by a robust talent pool and widespread adoption across sectors like retail, sustainability, healthcare, and logistics. This growth positions India as a global AI leader, though challenges like ethical safeguards and infrastructure remain.

India accounts for 16% of the global AI talent pool, with 600,000 professionals, expected to double to 1.25 million by 2027. The country’s AI market, valued at $5 billion in 2024, is growing at a 30.6% CAGR, according to a Nasscom-BCG report. Key sectors driving this include retail, where AI optimises supply chains and personalises customer experiences, and sustainability, where it enhances carbon emissions tracking. For instance, Meobyr, an IIT Madras-led startup, uses AI to streamline e-commerce logistics for platforms like Blinkit and Amazon, improving pricing and content management. In sustainability, Bacuti integrates AI with ERP systems to automate Scope 1, 2, and 3 emissions calculations, aiding compliance with global ESG standards.

Healthcare and logistics also see significant AI adoption. Startups like Niramai use AI-driven thermal imaging for early breast cancer detection, making healthcare accessible in rural areas. NoBroker leverages AI for property listings, while Razorpay automates 80% of customer support. Pocket FM has cut content production costs by 90% using AI, producing over 100,000 hours of content. The IndiaAI Mission, with ₹10,000 crore in funding, supports this growth by fostering research and infrastructure. Public digital systems like Aadhaar and UPI provide data scale, with 700 million internet users enabling AI innovation.

Challenges include ethical concerns, such as biases in AI models due to uneven data distribution, requiring stronger regulations. Infrastructure gaps, particularly in Tier 2 and 3 cities, and the high cost of AI adoption for small businesses pose barriers. Critics argue that over-reliance on AI risks job displacement, with 30% of current roles potentially automatable by 2030. However, AI-driven job creation, projected at 5 million by 2030, could offset losses if upskilling is prioritised. Posts on X highlight optimism about India’s AI talent but raise concerns about funding for early-stage startups, which dropped 7% to $7.6 billion in 2024.

Government initiatives like the National DeepTech Startup Policy and AI Centres of Excellence aim to address these issues, but scaling AI in rural areas and ensuring ethical frameworks remain critical. India’s 2,000 AI startups, including 17 new Indic AI models in 2024, signal a vibrant ecosystem, with companies like Lenskart using AI for virtual try-ons to enhance consumer experiences.

India’s AI market is poised for transformative growth, reshaping industries and supporting sustainability. Addressing ethical, infrastructural, and accessibility challenges will be key to sustaining this momentum and cementing India’s global AI leadership.

Source: Financial Express