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.
Report Attribute
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Key Statistics
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Base Year
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2024 |
Forecast Years
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2025-2033 |
Historical Years
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2019-2024
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Market Size in 2024 | USD 1,251.79 Million |
Market Forecast in 2033 | USD 12,429.61 Million |
Market Growth Rate 2025-2033 | 27.60 |
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.
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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.
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.
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 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:
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 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 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:
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:
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.
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.
Report Features | Details |
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Base Year of the Analysis | 2024 |
Historical Period | 2019-2024 |
Forecast Period | 2025-2033 |
Units | Million USD |
Scope of the Report | Exploration of Historical and Forecast Trends, Industry Catalysts and Challenges, Segment-Wise Historical and Predictive Market Assessment:
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Types Covered | Narrow/Weak Artificial Intelligence, General/Strong Artificial Intelligence |
Offerings Covered | Hardware, Software, Services |
Technologies Covered | Machine Learning, Natural Language Processing, Context-Aware Computing, Computer Vision, Others |
Systems Covered | Intelligence Systems, Decision Support Processing, Hybrid Systems, Fuzzy Systems |
End Use Industries Covered | Healthcare, Manufacturing, Automotive, Agriculture, Retail, Security, Human Resources, Marketing, Financial Services, Transportation and Logistics, Others |
Regions Covered | North India, West and Central India, South India, East India |
Customization Scope | 10% Free Customization |
Post-Sale Analyst Support | 10-12 Weeks |
Delivery Format | PDF and Excel through Email (We can also provide the editable version of the report in PPT/Word format on special request) |
Key Benefits for Stakeholders:
The India artificial intelligence market was valued at USD 1,251.79 Million in 2024.
The India artificial intelligence market is projected to exhibit a CAGR of 27.60% during 2025-2033 reaching a value of USD 12,429.61 Million by 2033.
The key drivers include a strong STEM talent pool, government initiatives such as the National AI Strategy, rapid digital transformation across industries, and rising demand for AI solutions in sectors like healthcare, manufacturing, and e-commerce.
Narrow/weak artificial intelligence accounts for the largest type in the India artificial intelligence market, representing 87.9% of the market share in 2024.