India Artificial Intelligence Market Research Report and Industry Forecast

India Artificial Intelligence Market Summary:

The India artificial intelligence market size reached USD 1,251.79 Million in 2024. The market is projected to reach USD 12,429.61 Million by 2033, exhibiting a growth rate (CAGR) of 27.60% during 2025-2033. South India currently dominates the market in 2024. The growth of the market is mainly attributed to a strong pool of skilled STEM talent, supportive government initiatives, rapid digitization across various end-use sectors, rising demand for AI-driven solutions, and continuous innovation in AI applications.

India Artificial Intelligence Market Insights:

• Narrow/Weak Artificial Intelligence represented the largest segment by type in 2024.
• Software accounted for the largest market share by offering.
• Machine Learning held the dominant share by technology.
• Intelligence Systems was the leading segment by system type.
• Manufacturing emerged as the largest end-use industry.
• South India dominated the market regionally in 2024.

India Artificial Intelligence Market Size and Forecast:

• 2024 Market Size: USD 1,251.79 Million
• 2033 Projected Market Size: USD 12,429.61 Million
• CAGR (2025–2033): 27.60%
• South India: Largest market in 2024

Artificial Intelligence, or AI, refers to a subdivision of computer science that is focused on the creation of intelligent machines apt to perform tasks that typically require human intelligence. It entails the development of algorithms and models that enable machines to learn from data, reason, plan, and adapt to new situations. AI technologies encompass various subfields, including machine learning (ML), natural language processing (NLP), computer vision, and robotics. AI is widely applied in diverse sectors, such as automation, healthcare, finance, and transportation, revolutionizing industries by expanding human capabilities and enabling machines to execute complex tasks efficiently and autonomously.

The India artificial intelligence market share is augmented by the vast pool of skilled talent in science, technology, engineering, and mathematics (STEM) fields that contributes to the creation of innovative AI algorithms, applications, and solutions that cater to both domestic and global markets. Moreover, the government's proactive approach to promote AI adoption through policy initiatives and funding support is bolstering the market expansion. In line with this, the introduction of the National AI Strategy and Startup India have encouraged investments in AI startups and facilitated collaborations between academia and industry, thus contributing to the market growth. Additionally, the rapid digital transformation across industries, including finance, healthcare, e-commerce, and manufacturing, has spurred the demand for AI-driven solutions to enhance efficiency, productivity, and customer experience, which, in turn, is strengthening the market growth.

India Artificial Intelligence Market Trends:

The abundant pool of skilled talent

India has a robust talent base of skilled professionals in the STEM stream due to its technical education system. This has led to many graduates who have specific knowledge in computer science, data science, and other allied fields, providing a strong base for AI research and development. India's talented individuals work actively on latest AI research, developing customized AI solutions for targeted industries and problems. The sheer talent pool has also driven the rise of AI startups with the help of incubators and venture capital companies. According to industry reports, India ranks seventh globally in terms of AI startups that were established between 2013 and 2023, with 338 enterprises. India is also seventh worldwide in terms of overall private AI investments between 2013 and 2023 with a total investment of USD 9.85 Billion. The growth of artificial intelligence market in India is being driven considerably by forward-looking policy initiatives, including the National AI Strategy and Startup India, that have powered investments, skill creation, and infrastructure development. As India is becoming a technology hub on the global front, the synergy of a talented workforce, growing digital economy, and increasing deployment of AI in various industries puts the country among the world's fastest-growing AI markets. Along with this, India's talent pool in AI is in demand worldwide, giving rise to offshore AI development centers, which is one of the major India artificial intelligence market trends strengthening the nation's position in the international AI market.

Government's proactive approach towards promoting AI adoption

The Indian government acknowledges the transformative potential of AI and has taken proactive measures to encourage its adoption across industries. They unveiled a National AI Strategy, outlining a comprehensive roadmap for AI development, talent nurturing, and robust infrastructure building to foster innovation and development. This commitment instills confidence among businesses and investors, leading to increased interest in AI projects and aiding in the market expansion, and augmenting the market size of AI in India. The government's ‘Startup India’ program supports entrepreneurship and innovation by providing financial assistance, tax benefits, and simplified regulatory processes to AI-driven startups, further strengthening the market growth. Moreover, in March 2025, the Union Government of India introduced the IndiaAI Dataset Platform to offer easy access to non-personal, high-quality datasets. This portal will host the largest database of anonymized data, enabling researchers and companies in India to create cutting-edge AI applications. Ty guaranteeing a variety and abundance of datasets, the project will promote AI-driven solutions in major industries, supporting innovation. Concurrent with this, the government is also fostering collaborations between academia and industry, facilitating technology transfer and knowledge exchange, and expediting AI applications across sectors. These initiatives collectively boost India's position in the global AI landscape.

Rising Enterprise Adoption and Sector-Specific Demand

A major trend shaping the India artificial intelligence market is the rapid uptake of AI technologies across enterprise-level applications, contributing to India artificial intelligence market growth. Indian businesses, ranging from large conglomerates to mid-sized firms, are increasingly deploying AI to enhance customer engagement, streamline operations, and improve decision-making processes. In sectors like banking, retail, and healthcare, AI is being used for fraud detection, predictive analytics, chatbot support, and diagnostics, respectively. Additionally, manufacturing companies are integrating AI-driven robotics and quality control systems to improve production efficiency and reduce downtime. Cloud-native AI platforms and API-based services are also making it easier for companies to scale AI adoption without heavy infrastructure costs, further propelling the AI Industry in India. This sector-specific penetration is supported by an increasingly favorable regulatory and data governance environment, giving enterprises the confidence to invest in long-term AI capabilities. On March 19, 2025, the Government of India announced significant progress under the IndiaAI Mission, receiving 67 proposals for the development of indigenous AI models, including 22 for Large Language and Multimodal Models and 45 for domain-specific applications in healthcare, education, and financial services. As digital transformation accelerates across industries, this trend is expected to further strengthen the commercial viability and economic impact of AI in the Indian market. This growth trajectory is expected to continue as businesses increasingly prioritize automation, customer experience, and operational efficiency. AI integration is becoming essential for competitiveness across India’s key industrial and service sectors.

India Artificial Intelligence Industry Segmentation:

IMARC Group provides an analysis of the key trends in each segment of the India artificial intelligence market report, along with forecasts at the country levels from 2025-2033. Our report has categorized the market based on type, offering, technology, system, and end-use industry.

Analysis by Type:

• Narrow/Weak Artificial Intelligence
• General/Strong Artificial Intelligence

Narrow/weak artificial intelligence represents the most widely used type, accounting for 87.9% of the market share in 2024. The demand for narrow/weak artificial intelligence is being propelled by its ability to provide specialized solutions for specific tasks, making it more accessible and cost-effective for various industries. As compared to general AI, narrow AI focuses on specific functions, enabling rapid deployment and efficiency improvements in areas such as customer service, data analysis, and automation. In addition to this, its targeted capabilities cater to diverse needs without requiring extensive data or computational resources, making it an attractive choice for businesses looking to leverage AI for specific tasks without the complexities of broader applications.

Analysis by Type:

• Hardware
• Software
• Services

Software accounts for the majority of the market share, accounting for 65.3% of the market share in 2024. The demand for software-based artificial intelligence is propelled by its flexibility, scalability, and ease of integration into existing systems. As a non-hardware-dependent solution, software-based AI offers cost-effectiveness and accessibility, enabling businesses of all sizes to implement AI capabilities without significant infrastructure investments. Moreover, software-based AI solutions can be easily updated and upgraded, ensuring continuous improvement and adaptability to evolving business needs, creating a favorable outlook for market expansion. Besides this, its compatibility with various platforms and devices makes it an attractive choice for organizations seeking to harness AI's potential to optimize processes, improve decision-making, and enhance customer experiences.

Analysis by Type:

• Machine Learning
• Natural Language Processing
• Context-Aware Computing
• Computer Vision
• Others

Machine learning holds the largest share, accounting for 45.8% of the market in 2024. The demand for artificial intelligence based on ML technology is fueled by its ability to learn from data, adapt, and improve performance without explicit programming. Furthermore, ML-powered AI systems can analyze vast amounts of data and identify patterns, making them crucial for complex tasks, including NLP, image recognition, and predictive analytics. Concurrently, the continuous learning process enables ML-based AI to stay relevant in dynamic environments and deliver accurate insights and predictions. As businesses increasingly seek data-driven solutions, ML-based AI proves crucial in unlocking valuable insights, driving innovation, and gaining a competitive edge in various industries and creating a favorable India artificial intelligence market outlook.

Analysis by System:

• Intelligence Systems
• Decision Support Processing
• Hybrid Systems
• Fuzzy Systems

Intelligence systems represent the most widely used system in 2024. The demand for intelligence systems is impelled by the growing need for data-driven decision-making, automation, and enhanced customer experiences. Intelligence systems, such as AI and ML, offer businesses the ability to process vast amounts of data quickly and accurately, uncover valuable insights, and predict trends. Besides this, these systems streamline operations, optimize workflows, and improve overall efficiency, resulting in cost savings and increased productivity. As per India artificial intelligence market forecast, as customer expectations rise, intelligence systems are improving on providing personalized recommendations, seamless interactions, and tailored services, enhancing customer satisfaction and loyalty. Consequently, the pursuit of competitive advantage has spurred the adoption of intelligence systems across diverse industries.

Analysis by End-Use Industry:

• Healthcare
• Manufacturing
• Automotive
• Agriculture
• Retail
• Security
• Human Resources
• Marketing
• Financial Services
• Transportation and Logistics
• Others

Manufacturing accounts for the majority of the market, with 23.2% share in 2024. The demand for artificial intelligence in the manufacturing sector is driven by its potential to revolutionize operations and address industry challenges. AI-powered systems optimize production processes, reducing downtime, minimizing waste, and enhancing overall efficiency. ML enables predictive maintenance, ensuring timely equipment servicing and preventing costly breakdowns. In addition to this, AI-driven analytics provide real-time insights, aiding in demand forecasting and inventory management. Furthermore, collaborative robots and autonomous systems automate tasks, increasing productivity and worker safety. Therefore, the expanding integration of AI in the manufacturing process to streamline operations and reduce costs is contributing to the India artificial intelligence market growth.

Regional Analysis:

• North India
• West and Central India
• South India
• East India

South India dominates the market in 2024, which can be attributed to the establishment of numerous IT and tech hubs, which have attracted a multitude of multinational corporations and startups specializing in AI. The supportive policies of the southern state governments, promoting innovation and providing incentives for tech enterprises, have also played a pivotal role. Moreover, a mature ecosystem of investors, incubators, and accelerators in these cities is stimulating the growth of AI startups. Besides this, advancements in sectors such as healthcare, e-commerce, and IT services, which extensively utilize AI, is further contributing to the region's dominance in the AI market.

Competitive Landscape:

The competitive landscape of the market is characterized by a dynamic and evolving ecosystem with a mix of established players and emerging startups. Large multinational technology companies have a significant presence in the market, offering AI-powered solutions and services to various industries. These global giants leverage their advanced AI research and development capabilities to cater to the Indian market and collaborate with local businesses. Simultaneously, India boasts a thriving startup culture, with numerous AI-driven startups emerging across different sectors. These startups focus on niche AI applications, such as NLP, computer vision, and AI-powered analytics, catering to specific industry needs. As the AI market continues to evolve, competition intensifies, driving companies to continually innovate and deliver cutting-edge AI solutions to stay ahead in this rapidly growing industry.

The report provides a comprehensive analysis of the competitive landscape in the India artificial intelligence market with detailed profiles of all major companies.

Latest News and Developments:

• June 2025: Samsung launched its 2025 Bespoke AI appliances in India, introducing the Bespoke AI Laundry Combo and expanding its AI Home platform across refrigerators, air conditioners, and washing machines. The Bespoke AI Laundry Combo, priced at INR 319,000 (USD 3,830), reduces drying time by up to 60% and energy use by up to 75%, featuring AI Wash & Dry, a 7-inch display, and auto detergent dispensing for up to 32 loads.
• June 2025: Google launched AI Mode in India as a Labs experiment, bringing its most advanced AI search experience to Indian users in English. Powered by a custom version of Gemini 2.5, AI Mode enables multimodal, real-time search using text, voice, and images, and allows users to ask complex queries 2–3x longer than traditional searches. With India already among Google's top markets for AI adoption and Lens usage, this rollout marks a significant step in strengthening the country’s consumer AI ecosystem and boosting homegrown content discovery via AI-powered search.
• June 2025: The Indian Union Minister of State for Science and Technology introduced "Bharat Gen," India's first indigenously built, government-funded, multimodal large language model (LLM) for Indian languages that is based on artificial intelligence (AI). BharatGen was developed under the National Mission on Interdisciplinary Cyber-Physical Systems and is being deployed at IIT Bombay under the TIH Foundation for IoT and IoE. Its goal is to transform the development of artificial intelligence across the linguistic and cultural spectrum of India.
• June 2025: OpenAI launched the OpenAI Academy in India in partnership with the IndiaAI Mission under the Ministry of Information Technology. With this project, OpenAI is expanding its educational platform internationally for the very first time, with the goal of improving access to AI technologies and teaching.
• May 2025: Microsoft and Yotta Data Services announced a strategic partnership to accelerate AI adoption in India by integrating Microsoft Azure AI with Yotta’s Shakti Cloud platform. This collaboration supports the IndiaAI Mission, which has received over 500 proposals for indigenous AI model development, by enabling secure, low-latency, sovereign AI infrastructure for sectors including healthcare, finance, and manufacturing. The partnership positions both firms to deliver scalable AI solutions aligned with India’s data sovereignty goals and strengthens the domestic AI market.
• February 2025: Krutrim launched India’s first AI frontier research lab, the Krutrim AI Lab, and announced a total investment commitment of USD 1.2 Billion by 2026, including an immediate USD 230 Million infusion via equity and debt. The company unveiled Krutrim-2 (12B), a large language model for Indic languages, and open-sourced six advanced AI models across text, speech, and vision, aimed at strengthening India’s AI capabilities. Krutrim will also deploy India’s first GB200 supercluster with NVIDIA by March 2025 and scale data center capacity to 1 GW by 2028, positioning itself as a major player in India’s AI infrastructure market.
• January 2025: Microsoft announced a USD 3 Billion investment in India over the next two years to strengthen cloud and AI infrastructure and advance AI skilling through the ADVANTA(I)GE India initiative. The company aims to train 10 million people by 2030, support 5,000 startups, and expand its datacenter footprint, contributing to India’s ambition of becoming an AI-first nation. This strategic move significantly accelerates the growth of the artificial intelligence market in India.
• January 2025: The Indian Union Minister for Electronics & Information Technology, Railways, and Information & Broadcasting announced the launch of a domestic, reasonably priced, and secure AI model backed by a high-performance computer facility. This project intends to support research and development (R&D), democratize access to AI, and create citizen-centric applications, especially in fields such as climate change and agriculture.
• October 2024: Tata Consultancy Services (TCS) launched a dedicated NVIDIA Business Unit under its AI.Cloud division to fast-track AI adoption across key industries in India, including manufacturing, BFSI, telecom, retail, and automotive. The unit will build solutions using NVIDIA AI Enterprise, Omniverse, and NIM microservices, and features India-relevant offerings like "Manufacturing AI for Industrials" and digital twin platforms for smart factories and autonomous vehicles. This move reinforces TCS’ position in India’s AI services market.

India Artificial Intelligence Market Report Scope:

Key Benefits for Stakeholders:

• IMARC’s report offers a comprehensive quantitative analysis of various market segments, historical and current market trends, market forecasts, and dynamics of the India artificial intelligence market from 2019-2033.
• The research study provides the latest information on the market drivers, challenges, and opportunities in the India artificial intelligence market.
• Porter's five forces analysis assist stakeholders in assessing the impact of new entrants, competitive rivalry, supplier power, buyer power, and the threat of substitution. It helps stakeholders to analyze the level of competition within the India artificial intelligence industry and its attractiveness.
• Competitive landscape allows stakeholders to understand their competitive environment and provides an insight into the current positions of key players in the market.