Advancements in India’s AI Technology, Talent, and Policy
India's AI ecosystem is developing steadily, supported by public investments in infrastructure, skill development, and applied innovation. While the country is not yet a global leader in foundational AI hardware or large-scale language models, its growing talent base and focus on language-specific, public-good AI solutions are creating meaningful contributions to regional and sector-specific applications.
AI as a Strategic Priority in Indian Businesses
Adoption of AI technologies among Indian companies is on the rise. Over 80% of firms now consider AI a strategic priority, slightly above the global average of 75%. With more than 520 tech incubators and an expected market growth rate of 25–35% CAGR, India’s AI sector is well-positioned to drive innovation and public-sector transformation.
Although India hasn’t yet reached the frontier of AI hardware or global-scale models, its early efforts in building talent and developing regionally relevant AI models are defining a use-case-driven AI environment.
Building AI Foundations for Indian Needs
India’s AI development focuses on practical, inclusive innovation, especially by creating models that address its linguistic diversity and public service requirements. Several government and academic projects are developing large language models (LLMs) tuned to Indian languages and contexts.
- BharatGen: Launched in 2024 as India’s first government-funded multimodal LLM aimed at enhancing public digital infrastructure.
- Sarvam-1: A 2-billion parameter model optimized for Indian languages and dialects, open-sourced for public use since October 2024.
- Hanooman Everest 1.0: A multilingual AI system supporting 35 Indian languages, with plans to expand to 90, launched by 3AI Holding and SML India.
- Digital India BHASHINI: A government initiative started in 2022 to improve digital and linguistic access through AI-based translation.
These projects may not match the scale of commercial giants from the US or China but focus on enabling accessible AI solutions tailored to India’s unique needs.
Expanding AI Talent in India
India’s digital talent pool is growing rapidly, supporting both domestic projects and global AI initiatives. AI skill development is a national priority, with policy and academic programs integrating AI into education and technical training, especially outside major metro areas.
- India ranks 2nd worldwide in public generative AI projects on GitHub and accounts for 16% of global AI developers.
- The AI-skilled workforce grew 14 times between 2016 and 2023.
- Demand for AI professionals is projected to hit 1 million by 2026.
- The IndiaAI FutureSkills Initiative promotes fellowships, curriculum updates aligned with NEP 2020, and AI labs in Tier 2 and Tier 3 cities.
- India leads globally in AI skill penetration among women, outperforming countries like the US and Israel.
The rise of Global Capability Centres (GCCs), focusing on AI product development and services, highlights India’s growing role as a talent hub.
AI Adoption Accelerating in Enterprises
AI adoption is gaining pace across startups and established firms. Funding for generative AI startups reached $230 million in FY25, nearly tripling from the first half of the year. Around 69% of Indian employees used AI tools at work in 2024, with most reporting improved productivity or work quality.
- 80% of Indian companies view AI as a strategic priority.
- 93% of small and medium businesses using AI reported increased revenue.
- The AI startup ecosystem benefits from over 520 incubators supporting innovation and scaling.
These trends indicate a shift toward practical AI integration, particularly in enterprise settings.
Infrastructure and Compute Resources
The ₹10,300 crore (approximately $1.2 billion) IndiaAI Mission is building a national AI compute grid to increase access to GPUs for startups, researchers, and public agencies. Although the budget is modest compared to other countries’ investments, it addresses India’s dependency on foreign compute resources.
- Deployment of 10,000 GPUs, with plans to add nearly 8,700 more.
- An open GPU marketplace offers compute access at subsidized rates (₹100/hour).
- 10 private vendors are engaged to ensure supply chain stability.
- Plans for indigenous GPU development over the next 3–5 years.
- Support for semiconductor fabrication includes five new plants under construction.
AI Progress in Other Countries
Understanding how other nations develop AI provides useful context for India’s path.
- United States: Leading the global AI market, valued at $87.18 billion with projections to reach $300 billion by 2026. AI adoption is widespread, and economists estimate a potential 14.5% GDP increase by 2030 depending on sector usage.
- United Kingdom: Boasts twice as many AI-powered companies as any other European country. AI contributed £3.7 billion to the economy in 2022, with government investment exceeding £2.3 billion since 2014.
- Japan: Focused on AI applications in elderly care, infrastructure, and automation. The market is expected to grow from $8.12 billion in 2024 to $35.52 billion by 2030.
- China: Projecting significant AI breakthroughs with high-tech sectors expected to contribute over 18% to GDP by 2026 despite economic challenges.
- Germany: Integrates AI into manufacturing, logistics, and product design. Currently, 13.3% of companies use AI, with over a third exploring applications.
Final Thoughts
India’s AI development emphasizes building public datasets, expanding AI skills, and improving access to computing resources. The country is not yet leading in hardware or large-scale models, but steady progress is laying a foundation for meaningful AI outcomes in the future.
For product developers looking to leverage AI, understanding India’s focus on language-specific models and growing talent pools offers practical insights. Whether you’re working on AI-driven products or seeking to collaborate with Indian AI teams, this evolving ecosystem presents valuable opportunities.
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