India’s AI Industry: The Next Trillion-Dollar Tech Wave?
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- Published 26 Dec 2025
AI is becoming a core part of India’s economy.
What started as a small technology segment is now emerging as one of the country’s most important growth engines.
India’s AI market is expanding at breakneck speed.
In 2024, it stood at $9.51 billion. In 2025, it is estimated to have grown to $13.03 billion, reflecting how quickly AI adoption and investment are accelerating.
By 2032, the market is projected to reach $130.63 billion, growing at a staggering 39% CAGR.
Over the next decade, AI could add $1.7 trillion to India’s GDP.
More than six million people already work across India’s broader tech and AI ecosystem, and in 2025 alone, AI-related investment commitments touched $20 billion.
This is no longer a sector quietly developing in the background. It is becoming one of the pillars of economic growth.
Adoption is already deeper than many realise.
Nearly half of Indian firms now utilise AI in some form, and 80% of companies consider AI a strategic priority rather than an experimental tool.
Within that, generative AI is starting to find clear use cases.
Companies expect to deploy GenAI most heavily in operations (63%), followed by customer service (54%) and marketing (33%).
In practice, that means companies will be using AI to make internal work easier, handle customer queries faster, and support marketing teams with content and campaigns.
In banking, productivity could rise by up to 46% with GenAI-based tools, as highlighted by the RBI.
In pharmaceuticals, almost 80% of companies already use AI in research and drug development.
India’s strength in AI is not just about demand; it is also about talent and capability. The country accounts for around 16% of the world’s AI talent pool.
Over 1,800 Global Capability Centres operate from India, with more than 500 of them focused specifically on AI, data, and automation.
Alongside this is a large startup base: roughly 1.8 lakh startups, and an estimated 89% of newly launched startups already using AI in some part of their business.
For most companies, AI is being adopted to cut costs, boost productivity, and stay competitive in both domestic and global markets.
However, AI is also a global race shaped by money and computing power.
Between 2013 and 2024, private AI investment in the United States reached about $470.9 billion, compared to $119.3 billion in China.
India’s figure, at $11.1 billion, is still relatively small in comparison, though it has been rising.
AI leadership is also shaped by physical infrastructure, particularly data centres built specifically for AI workloads.
When it comes to AI data centre clusters, China leads globally with 230 clusters, followed by the United States with 187. India currently has 8 AI data centre clusters,
This comparison highlights where India stands today in global AI infrastructure and highlights why scaling the AI infrastructure remains central to the country’s AI ambitions.
The government has begun bridging this gap through a focused push on AI infrastructure.
The IndiaAI Mission, approved with an outlay of ₹10,300 crore, is a five-year plan to build national-scale AI compute capacity and talent.
A key part of the programme is the deployment of 18,693 GPUs.
About 10,000 GPUs have already been rolled out in Phase 1.
At the same time, India is strengthening its semiconductor base, with five chip plants under construction and a roadmap to develop an indigenous GPU within three to five years.
Ten companies have also been selected to build a secure and diversified GPU supply chain.
Alongside infrastructure, the government is also focusing on broad-based AI literacy.
Through Yuva AI for All, 10 million citizens are set to receive free foundational training in artificial intelligence, aimed at making AI skills accessible beyond just engineers and specialists.
Large companies are backing this push with capital.
Reliance Industries and Meta have together committed $100 million to AI in India.
Amazon plans to invest $35 billion to support AI-driven digitisation and cloud infrastructure in India.
Microsoft has committed $17.5 billion toward cloud and AI infrastructure, while Google has announced a $15 billion AI hub in Andhra Pradesh.
Wipro has committed $1 billion toward AI and analytics, and TCS is building a one-gigawatt AI data-centre campus.
Looking ahead, the key questions remain: Can India scale to over 100,000 GPUs? Can home-grown models like Krutrim and Sarvam match global standards? Can the country build its own reliable AI hardware ecosystem?
One thing is certain. AI is no longer optional for India. It is becoming a core engine of economic growth and increasingly shaping how Indian companies operate.
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