India’s AI Sector Expected to Reach $5.1 Billion by 2027

Sharath Srinivasamurthy, Associate Vice President, IDC
Explore how India's AI market is poised for significant growth, with a forecast to reach $5.1 billion by 2027, supported by strong investments and government initiatives

India’s AI market is set to expand significantly, driven by talent growth and investment in the AI ecosystem, according to a recent study. By 2027, the market is projected to grow to $5.1 billion, with AI software being a key factor.

Key Highlights:

  • AI market in India forecasted to grow at a CAGR of 31.5%, reaching $5.1 billion by 2027.
  • India’s AI infrastructure spending is projected to reach $733 million by 2027.
  • A robust startup ecosystem and a large talent pool support India’s AI growth.
  • AI adoption focuses on improving productivity and customer experiences.
  • The government has allocated $30.7 million to establish three AI centers of excellence.

AI Market Growth and Investments

A recent study from a leading analyst firm has highlighted the rapid growth of the AI market in India. The AI software sector is expected to be the primary driver of this growth, reaching a projected $2.6 billion by 2027. Additionally, AI infrastructure spending is anticipated to hit $733 million by the end of the same period.

Strategic Investments and Sector-Specific Impacts

Investments over the next two years will primarily focus on developing AI infrastructure, supporting high-value applications in various sectors. The BFSI and manufacturing sectors are expected to be the top investors in AI technologies, with manufacturing playing a crucial role in economic expansion, especially in electronics and consumer goods.

Government Support and International Standing

India’s proactive government policies towards AI are significantly above the Asia/Pacific average. The upcoming fiscal year will see an investment of $30.7 million to establish three centers of excellence focusing on sectors such as agriculture, health, and sustainable cities.

Insights from AI for India Conference

The findings were discussed at the AI for India Conference on May 14, 2024, featuring key figures such as Mr. Santhosh Viswanathan, Vice President and Managing Director, India Region at Intel, and Sharath Srinivasamurthy, Associate Vice President, IDC. Mr. Viswanathan highlighted the strategic importance of AI in India’s future, noting the country’s ample talent pool and innovative capabilities.

As industries continue to integrate AI, the importance of adopting this technology to maintain competitiveness and thrive in a digital environment was a major theme at the conference.

About the author

Sovan Mandal

With a keen editorial eye and a passion for technology, Sovan plays a crucial role in shaping the content at PC-Tablet. His expertise ensures that every article meets the highest standards of quality, relevance, and accuracy, making him an indispensable member of our editorial team. Sovan’s dedication and attention to detail have greatly contributed to the consistency and excellence of our content, reinforcing our commitment to delivering the best to our readers.

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