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India Artificial Intelligence Market Size | Forecast Report, 2034

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India Artificial Intelligence Market: 2025–2034 Outlook & Analysis

India’s AI ecosystem is on a meteoric rise—growing from approximately USD 10.15 billion in 2025 to an estimated USD 45.72 billion by 2034, marking a CAGR of 18.20% during 2025–2034The market is being shaped by a robust combination of government interventions, enterprise investments, start‑up innovation, and a skilled talent pool.

Market Overview

The India AI market spans hardware, software, and services. In 2024, software commanded the largest revenue share, while services emerged as the fastest-growing segment . Key verticals include Media & Entertainment, BFSI, healthcare, retail, telecom, agriculture, manufacturing, automotive, and public services . Deep learning technologies currently dominate, particularly in content creation, predictive analytics, and conversational AI .

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Market Segmentation

By Component

  • Software leads in revenue share.

  • Services (implementation, consulting, managed) exhibit highest growth.

  • Hardware (GPUs, AI-capable data centers) plays a critical supporting role .

By Industry Vertical

  • Media & Entertainment tops adoption.

  • Fast followings include BFSIhealthcare, and retail/e‑commerce .

  • Emerging sectors include manufacturing, automotive, energy, telecom, agriculture, and government .

By Organization Size

  • Large enterprises initially lead investments.

  • SMEs are increasingly adopting AI, aided by cloud-based, affordable platforms .

Key Players

The Indian AI sphere is vibrant with both global and local players:

  • Global leaders: Google, Microsoft, IBM, Oracle, AWS, Intel, Salesforce, SAP, Cisco, Meta, NVIDIA, HPE, Siemens .

  • Indian IT giants: TCS, Infosys, Wipro, HCL, Tech Mahindra, Cognizant, Accenture India .

  • Homegrown startups: Sarvam AI (India-first LLMs in Indic languages), Neysa (GPU-cloud GenAI infrastructure), and Haptik (conversational AI), each gaining traction and investment .

Industry News

  • Capgemini–WNS acquisition: French firm Capgemini’s USD 3.3 billion purchase of WNS aims to combine WNS’s process expertise with Capgemini’s AI capabilities—highlighting the market’s shift toward intelligent business services.

  • Google AI Mode rollout in India: As of July 8, 2025, Google’s enhanced AI search interface (“AI Mode”) is fully available in India, marking a wider rollout of advanced generative AI to Indian users.

  • Boston Consulting Group forecast: India’s AI market is expected to triple to USD 17 billion by 2027, growing at a 25–35% CAGR from 2024–2027 .

Recent Developments

  1. Government investment & policy support

    • The IndiaAI Mission was approved in March 2024 with a ₹10,372 crore (~USD 1.23 billion) budget; funds are allocated for GPUs, AI safety, and national CoEs .

    • A ₹500 crore allocation in the 2025–26 budget is funding AI Centres of Excellence at IITs focusing on healthcare, agriculture, and smart cities .

  2. Compute infrastructure ramp-up

    • Over 10,000 GPUs are being deployed across national data centers, enabling large language model (LLM) development .

  3. Local LLM innovation

    • Sarvam AI, backed by IIT Madras, raised $41 million in 2023 and is leading work on Indic LLMs—selected under the IndiaAI Mission to build India’s foundational models.

  4. Startup & investment surge

    • Neysa secured $50 million across seed and Series A rounds to offer GPU-cloud infrastructure for GenAI startups .

    • Former Intel/AMD executives are launching AI semicon startups in India, positioning the country as an emerging AI chip center.

Market Dynamics

Drivers

  • Strong policy impetus (IndiaAI, AI CoEs, CoEs at IITs).

  • A vast and skilled IT talent pool, especially among knowledge workers using gen-AI.

  • Expanding use cases across healthcare, finance, retail, agriculture, manufacturing, and government .

Restraints

  • High compute costs and infrastructure investments may constrain adoption, especially among SMEs .

  • Talent shortages persist: an estimated shortfall of 200,000 AI professionals .

  • Data privacy frameworks like the Personal Data Protection Bill remain pending – creating regulatory uncertainty .

Opportunities

  • Rapid expansion in AI-powered healthcare, predictive agriculture, fraud detection, and intelligent automation.

  • Momentum in indigenous LLM and chip development will incentivize localized infrastructure investment.

  • Strategic partnerships and acquisitions (Capgemini–WNS, CleverTap–rehook.ai) signal consolidation and sector maturity .

Regional Analysis

  • South India: Bangalore, Hyderabad, Chennai lead innovation, due to IT infrastructure and talent clusters .

  • West India: Mumbai‑Pune corridor excels in fintech and enterprise AI.

  • North India: Delhi‑NCR focuses on smart city and government AI applications.

  • Emerging Regions: East and Northeast India experiment with AI in agriculture and disaster management .

Browse a Full Report – https://www.marketresearchfuture.com/reports/india-artificial-intelligence-market-21411 

Future Outlook

  • The India AI market is forecast to grow from USD 10.15 billion in 2025 to USD 45.72 billion by 2034, at an 18.2% CAGR .

  • Local foundational models and GPU infrastructure will drive GenAI adoption, with potential breakthroughs in Indic language LLMs.

  • India’s AI data center capacity and semicon manufacturing are set to expand, fostering vertical integration in AI value chains .

  • SME adoption via cloud platforms will accelerate as services mature and costs drop.

  • The regulatory landscape and data protection frameworks are expected to evolve, shaping AI governance.

About Market Research Future: 

Market Research Future (MRFR) is a global market research company that takes pride in its services, offering a complete and accurate analysis regarding diverse markets and consumers worldwide. Market Research Future has the distinguished objective of providing the optimal quality research and granular research to clients. Our market research studies by products, services, technologies, applications, end users, and market players for global, regional, and country level market segments, enable our clients to see more, know more, and do more, which help answer your most important questions. 

Contact 

Market Research Future (Part of Wantstats Research and Media Private Limited) 

99 Hudson Street, 5Th Floor 

New York, NY 10013 

United States of America 

+1 628 258 0071 (US) 

+44 2035 002 764 (UK) 

Email:[email protected] 

Website:https://www.marketresearchfuture.com 

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