India Artificial Intelligence (AI) Market

India Artificial Intelligence Market Size & Insights

India Artificial Intelligence Market (AI Market) size was estimated at USD 6.8 billion in 2024 and is slated to register a double digit CAGR of 19.2% over the period 2025-2032 and is projected to reach USD 27.7 billion in 2032 primarily driven by growing AI adoption, increasing government initiatives coupled with rise in the number of AI start-up in the country.

India AI Market Overview

Artificial Intelligence is the simulation of human intelligence in machines specifically programmed to think like humans and mimic their actions. It enables machines to enhance their capabilities in terms of learning, visual perception, speech recognition, decision making and problem solving. AI is being adopted by several industries as it offers several benefits such as the ability to enhance productivity, improve efficiency, and reduce costs.

India Artificial Intelligence Market Drivers

Growing AI Adoption

In India the adoption of AI is growing, around one third of the Indian maximizing the potential of AI, the major sectors leading the India AI adoption and utilizing the benefits of AI are BFSI, CPG and Retail, Industrial and automotive, healthcare.

Increasing Government Initiatives

The government of India’s vision of a 5 trillion dollar economy by 2027 has strong linked to AI adoption in the country. In 2021, the government of India partnered with US to launch, US India Artificial Intelligence (USIAI) to scale up the S&T relationship between India and the United States. Moreover, in 2020, NITI Aayog invited several health-tech startups and organizations under the initiative of ‘Empowered Group 6’ in order to leverage their low-cost innovative technologies to combat COVID-19. This included Qure.ai that uses AI-enabled analysis of chest X-rays to detect Covid-19 lung infections in under a minute and Mfine that is an AI-powered online doctor consultation and telemedicine platform.

Rise in the Number of Start-Ups in AI Space

The rise of startups in the field of AI will drive growth and innovation in the country. In 2020, Indian AI startups raised $836.3 million, the largest funding outlay during the last seven years. During the same year, Indian government increased the outlay for Digital India to USD $477 million to boost AI, IoT, big data, cybersecurity, machine learning and robotics.

Challenges Faced by India AI Market Players

However, factors such as lack of clarity of rules and regulations and the issues of integrity and ethics with AI and ML solutions is hampering the market growth of AI in India. Policy documents and working drafts on Artificial Intelligence issued by the Niti Aayog recognize ethical and fundamental concerns with the implementation of AI and hints towards a self-regulatory approach towards the same in coming times. Additionally, the policy documentation also identifies ethical challenges in AI based on their impact on the Indian society while recognizing the issues such as the ‘Black Box Phenomenon’, the issues of data collection without proper consent, the privacy of personal data, inherent selection bias, risk of profiling and discrimination, and non-transparent nature of certain AI solutions.

India Artificial Intelligence Market Segment Analysis

India AI Market Offering Type Insights

Based on offering, the software segment occupied the largest market share in 2024 and will continue to witness double digit growth in the coming years. ​Software in AI are being widely used to optimize business operations, automate procedures, improve workplace communication, and get business insights. For instance, Zen3 acquired by Tech Mahindra offers expertise in software product engineering, DevOps testing, AI, machine learning, and analytics.

India AI Market Technology Insights

Based on technology, Natural Language Processing (NLP) is expected to witness the fastest growth in the coming years. Natural language processing technology coverts any text data of businesses such as purchase orders, invoices, social media posts, service agreements, research documents into the searchable text file to increase the efficiency and effectiveness by combing text data. This technology is widely adopted across industries such retail, BFSI among others. For instance, in 2021, ICICI Lombard General Insurance partnered with Microsoft’s speech-to-text tools to build up artificial intelligence (AI) capability in dealing with customers. The company has deployed Azure Speech Services and NLP in its outward call centres to automate supervision of calls.

India Artificial Intelligence Market End-User Insights

Based on end-user, healthcare industry is expected to witness high implementation of AI in the coming years. Increasing adoption and launching of AI-based technologies in the healthcare industry by the leading players such as in 2021, Roche Diagnostics India, developed AI based application for healthcare workers that includes access to counselling sessions and self-assessment tools.

India Artificial Intelligence Market Major Players & Competitive Landscape

Several leading companies are Microsoft, Nvidia, Google, AWS, Intel and many more.

The robust growth in the India AI market is reshaping the industry as established players are looking for acquiring existing AI start-ups to accelerate their AI services transformation and this trend is projected to push market towards market consolidation.

India AI Market Market News

• • In 2025, CleverTap, the all-in-one engagement and retention platform, acquired rehook.ai which provides promotions automation solution, empowering businesses to manage coupons, discounts, gamification, loyalty programs, and referral initiatives.
  • In 2025, NIIT acquires majority stake in iamneo, which provides  deep skilling technology training solutions through a scalable AI powered SaaS platform
  • In 2021, Intel in collaboration with Central Board of Secondary Education (CBSE), Ministry of Education has announced the launch of the AI For All initiative with the purpose of creating a basic understanding of artificial intelligence (AI) for everyone in India.
  • In 2020, NVIDIA collaborated with IIT Hyderabad to established India’s first NVAITC (NVIDIA AI Technology Centre) to accelerate research on Artificial Intelligence and its commercial adoption.

India Artificial Intelligence Market Scope of the Report

India AI Market Research Report Segmentation

India Artificial Intelligence market has been segmented on the basis of offering, technology and end-user. Based on offering, the market is segmented into hardware, software and services. Based on technology, the market is segmented into machine learning, natural language processing and others. Machine learning is further bifurcated into deep learning and others. Based on end-user, the market is segmented into healthcare, BFSI, retail, manufacturing, automotive and transportation, agriculture, media and entertainment and others.

India Artificial Intelligence Market by Offering

• • Hardware
  • Software
  • Services

India Artificial Intelligence Market by Technology

• • Machine Learning
    • Deep Learning
    • Others
  • Natural Language Processing (NLP)
  • Others

India Artificial Intelligence Market by End-User

• • Healthcare
  • BFSI
  • Retail
  • Manufacturing
  • Automotive & Transportation
  • Agriculture
  • Media & Entertainment
  • Others

India Artificial Intelligence Market Leading players

• • Microsoft
  • Nvidia
  • Google
  • Amazon Web Services (AWS)
  • Intel