India’s artificial intelligence (AI) market is projected to grow at a 25% CAGR to reach about $17 billion by 2027. The growth will be fuelled by multiple factors such as rising enterprise tech spending and growing AI talent base and investments.At present, the country has the second-highest installed talent base with 420,000 employees working in AI job functions. The skills penetration is also the highest with three times more AI skilled talent than other countries, according to a Nasscom-BCG AI Acceleration Survey.The country ranks among the top five nations with a 14 times growth in individuals skilled with AI in the last seven years. As the investments in AI continues to increase, the demand for AI talent in India is also expected to grow at 15% CAGR till 2027.
“Indian tech companies, with the advent of Gen-AI, are expanding their portfolios beyond traditional IT and business process management to include AI-driven analytics, intelligent automation and personalised customer interactions. These companies are not just adopting AI, they are redefining their service offerings, creating more value for their clients, and setting new industry standards,” Nasscom president Debjani Ghosh said.“Accelerating this journey will require massive scale investment on AI skilling, investments in ethical and secure AI development practices and governance frameworks and a fundamental shift towards a human-centered approach, prioritising transparency and human oversight,” she added.
The technology industry in India is already seeing more than 15% growth in AI/ML jobs over the past 12 months with positions such as AI engineers growing at 67% year-on-year. Recognising the importance of human capital in the AI journey, leading firms have invested heavily in upskilling and reskilling their workforce in AI and related technologies, with some organisations allocating $1 billion over the next three years dedicated to upskilling, it said.“The exponential growth of India’s AI market underscores the country’s crucial role in driving global innovation. This is seen in all aspects — investments within India, use cases across a range of industries, and growth and scale of talent we are seeing in India. Indian companies are starting to keep pace with the growth of AI and the tech sector is creating future-ready organisations with dynamic and evolving Centres of Excellence (CoE) driving the AI agenda,” Rajiv Gupta, MD and senior partner, BCG, said.
Globally, investments in AI have seen a 24% CAGR growth since 2019, with 2023 seeing investments close to $83 billion. The majority of this was made in horizontal AI applications in data analytics, Gen-AI, and ML algos and platforms. About 93% of the investments made by Indian tech services and made-in-India product players focus on digital content, data analytics and supply chain.According to the survey, in terms of capabilities and investment, 70% of the respondents have well-defined frameworks for financing use cases. Further, more than 70% companies have AI partnerships in place predominantly with GenAI and cloud partners.Companies have onboarded dedicated AI leaders and have strong CXO leadership buy-in on the AI agenda. According to the survey, over 68% of the respondents have dedicated executives leading AI initiatives. Further, more than 58% of respondents have senior leadership committed to AI initiatives.
On the people front, 90% of the top 25 providers have made large-scale Gen AI skilling commitments. Around 80% companies are proactively working to incorporate new AI specific roles across the organisation and ensure necessary upskilling for existing workforce. These roles include, Chief AI Officer, AI Architect, AI/ML Governance Specialist, AI Ethics & Compliance Officer, to name a few.
