India has carved out a strong global position as the world’s back office, delivering end-to-end customised software solutions for enterprises across industries. Over the decades, the country’s technology sector has consistently adapted to waves of technological change, converting disruption into growth opportunities. This resilience is reflected in projections that India’s IT industry revenues will cross the $300 billion mark in FY26, despite growing concerns around technological disruption.
Offshore technology centres alone are estimated to have generated nearly $98 billion in FY26, while more than 100 new global capability centres (GCCs) were established during the year. Yet, beneath this growth story lies a growing anxiety: will AI fundamentally alter India’s role in the global technology ecosystem?
The Indian technology industry’s success has largely been built on services capabilities. However, opportunities to create globally successful technology products have remained limited. Despite repeated attempts to enter international product markets, most Indian-built products have catered primarily to domestic requirements and price sensitivities, with limited traction overseas. Even in the fast-growing AI infrastructure and foundation-model layers, India has not emerged as a major player so far, largely due to the absence of a deep talent ecosystem and the enormous investments required.
Product Gap
However, a significant opportunity is now emerging in the form of vertical AI – purpose-built AI platforms designed for specific industries and business domains. Unlike general-purpose AI systems, vertical AI solutions are tailored to address the nuanced requirements of sectors such as healthcare, agriculture, legal services and financial services.
The market opportunity is substantial. In the US alone, spending on vertical AI was estimated at $3.5 billion in 2025 and is expected to grow at an annual rate of 22% through 2034. Enterprises are increasingly realising that broad, generic AI systems may not be sufficient to solve domain-specific business problems. Instead, they require industry-focused AI solutions built on deep contextual understanding.
This shift plays to India’s strengths. Decades of working closely with multinational corporations on business processes and software systems have given Indian companies deep operational insights across sectors. These long-standing relationships, combined with domain expertise, position India well to build specialised AI-driven solutions for global markets.
India’s startup ecosystem is also moving quickly. With nearly 3,000 AI startups operating across the country, many are already developing vertical AI applications aimed at both domestic and international markets.
Impact at Scale
State governments, too, are actively embracing AI-led initiatives. Tamil Nadu, Karnataka and Telangana have launched programmes focused on AI-driven governance, AI-enabled education systems and AI-focused trade infrastructure.
Healthcare is emerging as one of the most promising sectors for AI-led transformation in India. AI-powered diagnostics are expanding access to healthcare for underserved populations. With India having roughly one doctor for every 850 people, AI-based diagnostic tools could significantly improve access, efficiency and early detection. Beyond diagnostics, AI is also being deployed across multiple clinical and administrative applications.
Agriculture is witnessing a similar shift. The government’s Kisan e-Mitra chatbot is leveraging widespread smartphone access among farmers to provide multilingual AI-based advisory services. Farmers can now receive guidance on crop selection, yield optimisation, quality assessment and cultivation practices in real time, helping reduce dependence on middlemen while improving decision-making.
In financial services, AI-powered credit-scoring models are helping lenders assess borrowers who lack formal credit histories. By using alternative data points to establish creditworthiness, these models are expanding financial inclusion while improving risk assessment for lenders.
The real opportunity for India’s vertical AI ecosystem lies in combining technological capability with deep domain understanding. Success will depend not merely on building AI tools, but on demonstrating a nuanced understanding of how industries function and translating those insights into scalable, practical solutions.
The opportunity is significant, but the window may not remain open for long. India must move quickly if it hopes to establish itself as a global leader in vertical AI.