The rising demand for AI-integrated systems in India is fostering the growth of India’s AI market

The latest report of International Data Corporation (IDC), India Artificial Intelligence Market, 2021 predicts India’s AI market to reach US$ 7.8 billion by 2025 at a compound annual growth rate (CAGR) of 20.2%, from a market value of US$ 3.1 billion in 2020. Moreover, the AI service market is set to lead the overall AI market growth in India by 2025 at a CAGR of 35.8%. 

India is among the top 10 nations in the world in terms of technological advancements and funding in artificial intelligence, according to findings from a study published by The Brookings Institution. While India is outside the top 10 in terms of commercial and research initiatives, it ranks sixth in terms of spending and investments on AI made by the public, governmental initiatives, as well as private institutes and organizations.

Artificial intelligence has become an integral part of our lives. Whether it is getting shopping recommendations on e-commerce websites, those Netflix suggestions, or even emails, AI is at play behind the scenes. It’s not just the global landscape, but also within India that winds of change have begun to blow.

At present, the demand for AI-integrated systems is rising across India on account of rapid digitization in various industries, such as banking, financial services and insurance (BFSI), telecommunication, healthcare, and automotive. Moreover, the flourishing Information and Technology (IT) industry, coupled with the increasing use of cloud-based applications, is driving the sales of these systems in the country. Additionally, benefits offered by AI-integrated systems including, analysis of large amounts of data, consumer experience across several industries, and extraction of insights regarding overall operational efficacy, is strengthening the market growth. Apart from this, the outbreak of coronavirus disease (COVID-19) has propelled various industries to invest in the research and development (R&D) of AI, which is offering a positive market outlook.

AI Initiatives in India 

The Indian Government is playing a significant role as well and recently joined a Multinational Alliance on Artificial Intelligence that includes big nations such as the United States, the UK, and Australia. Also, India has launched a Nationwide Artificial Intelligence Plan to bring the best of ideas and expertise from all fields and industries together making it one of the most happening and promising technology ecosystems to watch out for. The National policymakers substantially expanded public AI funding through promises, such as increased R&D spending, the creation of industrial and construction funds by startups, network and technology investments, and public procurement relevant to AI. The government is also creating and fostering AI through numerous variations of public-private academies; the creation of technology parks and the connection between big companies and startups.

India is still in the process of making its population technology savvy. Yet, the country has seen great advancement in technology across many sectors. India is at the forefront in the field of artificial intelligence and robotics. However, the country is lagging slightly behind in the robot race when compared to technology-aggressive countries like the US, China, and South Korea.

If India has to keep up with its neighbor and competitor China, which is rapidly progressing in AI-based research and development, we have to include AI-related innovation and infrastructure in nationwide developmental projects. Indian government’s flagship program Digital India is aimed to transform the nation into a digitally empowered society with a conducive ecosystem that can greatly improve the country’s productivity and wealth. The interface between the researchers, industry, and government needs to be robust to provide for advancement in technology and thereby growth.